Not all income stocks live up to their full potential. Utilizing the payout ratio, or the percentage of profits a company returns in the form of a dividend to its shareholders, we can get a good bead on whether a company has room to increase its dividend. Ideally, we like to see healthy payout ratios between 50% and 75%. Here are three income stocks with payout ratios currently below 50% that could potentially double their dividends.
This week we'll start off with a company that's well-known in many American households: coffee giant Starbucks (NASDAQ:SBUX). Currently paying out $0.80 on an annualized basis, good enough for a 1.4% yield, it's my belief that Starbucks could jump its payout to $1.60 on an annualized basis sometime within the next decade. Income investors looking for an attractive stock that has the potential to double, or perhaps even triple, its dividend in the coming years would be wise to pay close attention to financial products firm Lincoln National Corporation (NYSE:LNC). Lastly, I'd turn your attention to B/E Aerospace (NASDAQ:BEAV), a manufacturer of cabin interior products for commercial and business planes.
Source: Motley Fool
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