24/7 Wall St.

Dividends and income growth drive value and income investors alike. Companies raising their dividends often keep investors far longer than companies that refuse to reward their shareholders by returning capital to them. 24/7 Wall St. has identified five big expected dividend hikes for April of 2013.

We expect dividend hikes from Exxon Mobil Corp. (NYSE: XOM), Chevron Corp. (NYSE: CVX), Johnson & Johnson (NYSE: JNJ), Dow Chemical Co. (NYSE: DOW) and International Business Machines Corp. (NYSE: IBM). Below, we have added color on the past dividend hikes and tried to make a projection for how each payout could be lifted.

We have a twofer from the oil patch. Exxon Mobil Corp. (NYSE: XOM) and Chevron Corp. (NYSE: CVX) are both expected to increase their dividends in late April. We will not try to guess which one will go it first. Both stocks are Dow Jones Industrial Average components, and they both announced dividend hikes on the same day in April of 2012. Chevron’s dividend hike increased 11% and Exxon Mobil’s was up 21%, but Chevron’s dividend yield is still higher at about 3.0%, versus about 2.6% today. A safe guess is a payout increase of 8% to 10% on average, but we will leave that up to them.

Another expected dividend hike may come from Johnson & Johnson (NYSE: JNJ), which is a dividend aristocrat due to raising its payout each year, whether or not it has had problems. That is generally announced in April and payable in May. With the Thomson Reuters estimate at $5.41 per share, its $2.44 current payout represents about 45% of adjusted income. The payout went from $0.57 to $0.61 per quarter when it was hiked a year ago, so we would not be looking for any abnormal boost in the dividend.

Dow Chemical Co. (NYSE: DOW) reported last April that it was lifting its dividend by a sharp 28% to $0.32 per quarter from a prior payout of $0.25 per quarter. The last payout was just made to shareholders in March, so it may be hard to demand that what is already a 4.0% or so dividend yield has to go higher. Also, at a $1.28 per year payout, that is already half of its adjusted expected earnings for 2013, as the Thomson Reuters consensus is $2.35 in earnings per share.

International Business Machines Corp. (NYSE: IBM) is due for yet another dividend hike, since the previous one came last April. The stock is close to all-time highs, and the dividend is currently yielding only about 1.6%. With a longer-term outlook of $20.00 in earnings per share, and with Thomson Reuters having current year earnings at $16.77 per share, a current annualized payout of $3.40 per share can easily be raised. Big Blue has the opportunity to double its dividend in the coming years, but we expect the dividend to be raised to either $0.95 or $1.00 per share per quarter. IBM already has signaled that it plans to have more returns of capital.

These are the biggest dividend payment hikes we would look for in April. We cannot assure that they all will come about, but history and market conditions favor these trends.