Dividends4Life: 3 Great Income Stocks that Could Double their Dividends

When searching for income stocks, investors should always study their payout ratios -- the percentage of a company's earnings or free cash flow (FCF) that it spends on dividends. If those ratios exceed 100%, the dividend might not be sustainable. On the other hand, when the ratio is low, it signals that a company can significantly boost its dividend. Today, we'll check out three solid income stocks which can easily afford to double their dividends over the long term.

HP (NYSE:HPQ), the world's largest PC vendor, pays a 2.9% forward yield. After splitting with Hewlett-Packard Enterprise in late 2015, the "new" HP hiked its dividend last year, and should keep raising that payout annually for the foreseeable future. Shares of Intel (NASDAQ:INTC) have stayed nearly flat over the past 12 months due to ongoing concerns about its PC and data center chip businesses. Its PC chip business is being challenged by a resurgent AMD, while its near-monopoly in the data center chip market is being targeted by AMD, Qualcomm, and other new rivals. Apple (NASDAQ:AAPL) started paying a new dividend in 2012, and has raised that payout for five consecutive years. Its forward yield of 1.6% looks unimpressive compared to the S&P 500's current yield of 2%, but Apple has plenty of room to raise its dividend. It spent just 27% of its earnings and 25% of its FCF on its dividend over the past 12 months -- so it could easily double its payout without missing a beat.

Source: Motley Fool

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