Stock Quotes in this Article: HD, SWK, TROW

 BALTIMORE (Stockpickr) -- Earnings season has been keeping dividend increases rolling. Last week, 34 companies raised their cash payouts to shareholders, another strong sign for the state of the market’s recovery.

Dividend stocks have been enjoying a renewed interest on Wall Street in the last few years, as investors sought returns that were free of the market’s ebb and flow. And because dividend-payers are subject to more standard valuation metrics (the discounted dividend model, for example), fundamental investors are generally more comfortable with the level of certainty they have over an income stock’s valuation.

That’s not to say that dividend stocks can’t provide attractive capital gains, however. In fact, historically, the opposite has been true.

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    Over the last 36 years, dividend stocks outperformed the rest of the S&P 500 by 2.5% annually, and they outperformed nonpayers by nearly 8% every year, all while paying out cash to their shareholders, according to a study from NDR. And while that statistic applies to all companies that pay dividends, the companies that increase those dividend payouts over time are even better.

    So are you sold on dividend stocks? Here’s a look at this week’s dividend stocks with recent dividend increases.

    Home Depot

    Times have been good for Home Depot (HD) in the last year. Shares have rallied more than 23% in the trailing 12 months, a nice change for long-term shareholders of the company, who saw their stakes contract severely in 2007 and 2008 under pressures of the housing market crackup. Now, with a svelte new cost structure and same-store growth underway, Home Depot is rewarding its owners by increasing its dividend payout 5.8% to 25 cents per share -- a 2.54% yield at current share prices.

    Home Depot’s transition from debt-fueled growth story to its current standing actually happened much quicker than most analysts anticipated. That’s evidence of management’s commitment to staying competitive in a deteriorating sales environment, even if that commitment meant pain in the short-term. The company’s expanding margins are a testament to the fact that the turnaround worked, but that said, the stock’s deep discount valuations are a distant memory for most investors.

    Even so, one of the heftier dividend payouts in the industry and a history of returning shareholder value should still keep attracting investors; massive cash flow generation abilities ensure that trend will continue.

    One of Home Depot’s biggest institutional shareholders is San Francisco-based investment manager Dodge & Cox.

    Stanley Black & Decker

    Stanley Black & Decker (SWK) is another home improvement-related firm that hiked its dividend payouts last week. The company increased its dividend by 20.6% to 41 cents per share, a 2.21% dividend yield.

    Unlike Home Depot, Stanley’s business strategy is hinged on industry consolidation. Last year, the company was actually two distinct firms, Stanley Works and Black & Decker. The two merged in March 2010, creating a massive, diversified tool company with product offerings ranging from do-it-yourself and professional construction tools, to security systems.

    In the process, the company has been moving away from high exposure to the retail market, which currently contributes around 60% to the top line. It’s a wise move, particularly given the continued pressures on the consumer DIY market.

    Maverick Capital holds 3.8 million shares of Stanley as of the most-recent quarter, for 2.8% of the total portfolio. With a B buy rating from TheStreet Ratings, it's one of the top-rated household durable goods stocks.

    T. Rowe Price

    In the asset management business, T. Rowe Price’s (TROW) conservative bent has long made the firm one of the most attractive firms in the industry. Investors agree -- they’ve been funneling significant cash into T. Rowe’s funds and managed accounts, growing assets under management to a record $482 billion in 2010. The company’s own shareholders have been rewarded in kind: last week, the company announced a 14.8% dividend increase that brings its quarterly dividend to 31 cents per share.

    Conservatism in its investments not only subjected T. Rowe Price’s clients to relatively less painful drawdowns in 2008, it also helped contribute to the large proportion of retirement dollars that make up its AUM. Those stickier retirement clients mean more resilience for T. Rowe’s bottom line when times are tough.

    That doesn’t mean that the firm has been sticking to old-fashioned investments. Innovative offerings such as T. Rowe’s target date funds are one of the biggest catalysts for growth right now, providing would-be investors with a hands-off route to retirement. Ultimately, T. Rowe should continue to thrive as cash comes back into risk assets.

    Among T. Rowe Price’s biggest shareholder is Generation Investment Management, an investment firm founded by Al Gore and David Blood. The stock was one of Goldman's seven best financial stocks for 2011.

    For the rest of this week’s dividend-increasing stocks, check out the Dividend Stocks for the Week portfolio on Stockpickr.

    And if you haven't already done so, join Stockpickr today to create your own dividend portfolio.

    -- Written by Jonas Elmerraji in Baltimore.

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    At the time of publication, Elmerraji had no positions in stocks mentioned.

    Jonas Elmerraji, based out of Baltimore, is the editor and portfolio manager of the Rhino Stock Report, a free investment advisory that returned 15% in 2008. He is a contributor to numerous financial outlets, including Forbes and Investopedia, and has been featured in Investor's Business Daily, in Consumer's Digest and on MSNBC.com.