Each month, I make a point to screen for stocks that are likely put more cash in your pocket. As Chief Investment Strategist of High-Yield Investing, it’s part of my job.

In each issue of my premium newsletter, I scan the market for potential dividend hikes. Ideally, I’m looking for hikes that could happen over the next four to six weeks. I also highlight noteworthy special distributions on the horizon.

We don’t do this just for fun. In a perfect scenario, we find great ideas for consideration in our premium portfolio… Companies posting outsized double-digit increases, and reliable dividend-payers that have been steadily growing payouts for a decade or more.

I flag these stocks first for my premium readers so that they can research them and get a head start. Then, I share them with the public.

We’ve had a pretty good run of finding solid ideas from this exercise, so it pays to follow these ideas. Some of them pay off big time.

If you’re looking for a potential addition to your income portfolio, then I can’t think of a better place to start. So without further delay, here’s what I’ve found this month…

2 Upcoming Dividend Hikes

1. Store Capital (NYSE: STOR) – Much like Realty Income, this landlord manages a growing collection of single-tenant properties rented out under triple-net leases (where the renter covers all property taxes, insurance, and maintenance). STOR owns a national portfolio of 2,500-plus properties occupied by restaurants, furniture stores, auto repair shops, fitness centers, and others.

Needless to say, most of these tenants have been impacted to one degree or another by the Covid pandemic. Still, occupancy rates remain quite strong at 99.5%. And the company has ample liquidity to weather this downturn, with modest leverage and no near-term debt maturities.

Over the past year, the portfolio has expanded from 2,334 properties (worth $8.0 billion) to 2,552 locations (worth $9.1 billion). In turn, quarterly adjusted funds from operation (AFFO) has grown at a healthy-double-digit pace. And as a real estate trust, most of the profits are handed right back to stockholders.

Since 2015, distributions have risen from $0.27 to $0.29 to $0.31 to $0.33 to the current $0.35 per share. That growing payout, combined with a swift Covid-related drop in the stock, has elevated the yield to 6.4% — about three times the S&P average.

Over the past year, STOR has put more than $1 billion in fresh capital to work acquiring new properties, driving annual rental income from $646 million to $730 million. Better still, most leases have rental hike escalators that automatically push rates upward each year.

Out of caution, the company has temporarily withdrawn its guidance and pulled back on its spending. Still, given the steady cash flows, flexible balance sheet, modest payout ratio (70%), and resilient occupancy (three-fourths of tenants are rated investment-grade), I think we could see another dividend hike on the horizon.

2. Illinois Tool Works (NYSE: ITW) – Founded over a century ago, ITW manufactures a wide range of specialized machinery and industrial equipment. The product lines, which are grouped into seven different segments, are too numerous to list here… auto parts, welding tools, restaurant dishwashers, and refrigerators.

It may seem like a hodge-podge, but this proud American company has become a global leader, operating in more than 50 countries worldwide. And its operating metrics speak for themselves. ITW is expecting to deliver a lofty return on invested capital (RoIC) of 40% and a free cash flow/net income ratio above 100%.

And from every dollar of profit, it returns $0.50 to investors.

This Dividend Aristocrat has raised its payouts like clockwork for 56 consecutive years and counting. And while most of its peers offer little more than a token hike of a penny or two, ITW has doubled its quarterly payouts from $0.55 per share in 2015 to $1.07 currently.

Having the financial wherewithal to lift payouts for over half a century without a single cut (or even a pause) speaks to the firm’s ability to generate cash even in recessions. It doesn’t hurt that it also has $1.4 billion in cash on hand zero short-term debt.

Action To Take

I think STOR would make a strong candidate for patient investors willing to withstand some near-term volatility. But don’t just take my word for it. This is Warren Buffett’s favorite real estate stock — Berkshire Hathaway has acquired over 18 million shares.

And I think ITW will hold true to its shareholder-friendly history and come through again with another hike next month.

Remember, just because these stocks are likely to increase dividends doesn’t necessarily make them “buys.” These are merely ideas to get you started in the hunt for high yields.

In the meantime, if want to know about my absolute favorite high-yield picks, then I invite you to check out my latest report right here.