As part of our multi-part series about dividend stocks, we are taking a comprehensive look at the wide range of dividend strategies that investors are currently deploying. For example, in part two of the series, I looked at stocks with dividend yields in excess of 4%, which also have a built in margin of safety.

#-ad_banner-#Of course such stocks carry a clear flaw: Although interest rates now appear to remain quite low in 2015, they are bound to eventually rise higher in coming years. And as the yields on fixed income investments start to rise, they will start to draw funds away from stocks that are likely to produce only modest dividend growth.

That’s why some investors don’t focus on the dividend yield, but instead on dividend growth. The appeal is self-evident: stocks that can produce income streams that march higher and stay ahead of comparative fixed-income yields, promise more robust long-term returns.

Not only do such stocks, many of which yield 2%-to-4%, produce a higher payout than bonds, but they also hold the promise of solid price appreciation if they are undervalued. In contrast, bond yields are unlikely to fall much more, and as they eventually rise, bond prices will suffer, blunting any income gains.

But how do you know if a dividend growth stock is undervalued? The easiest way to gauge such stocks is through the dividend discount model. For a fuller explanation of this approach, please click here.

Note that the dividend discount model focuses on several variables: The current dividend, the required rate of return (which should be in the 7%-to-9% range in light of realistic long-term investment growth assumptions) and the dividend growth rate.

Yet focusing on such formulas can overly complicate the investment analysis. Let’s simplify things and focus solely on stocks that already deliver yields in excess of fixed-income alternatives and appear poised to boost dividends at a double-digit pace. That should help them retain superior yields over the course of time.

What kind of universe of stocks are we talking about? Well, of the 1,500 companies in the S&P 400, 500 and 600, 470 of them (roughly one-third) offer current dividend yields in excess of 2.0%. And among those stocks, 182 of them have boosted dividends, on average, at a double-digit pace over the past three years. And of that group of 182 stocks, 72 of them maintain payout ratios below 40%, which means they aren’t overstretching themselves in terms of dividend growth.

Of course, past performance, as they say, is not indicative of future trends. To see which stocks are capable of sustaining such growth, I spent a few days reviewing those 72 stocks and have generated a group of 12 stocks that appear poised for sustained dividend growth. It’s a qualitative assessment, based on current payout ratios and company-specific growth prospects.

Here’s what I came up with:

Corning, Inc.  (NYSE: GLW), which has a strong grip on the glass and fiber markets, may not be an obvious choice for robust dividend growth. After all, the company’s sales are likely to remain flat in 2015 and only grow around 5% in 2016. Yet, the company also has an overly strong balance sheet. Typically, such mature companies seek out an optimal level of debt to minimize taxes and boost return on equity.

But Corning carries roughly $5.5 billion in cash, against $3.2 billion in long-term debt. At a minimum, Corning can look to spend just enough cash to bring the cash balance down to debt levels, which means that it has $2.3 billion spare cash, in addition to its $1.5-to-2.0 billion in annual free cash flow, to support the dividend.

Like many companies, Corning is currently allocating funds toward both share buybacks and dividend boosts. The current payout was hiked 20% in early December to $0.48 a share and Corning can afford to keep hiking the dividend at that rate for many years to come.

You’ll notice that I put several insurers in this group, for one simple reason: As interest rates eventually rise, so will the interest income on their hefty cash balances.  Take The Travelers Companies, Inc. (NYSE: TRV) as an example. Back in 2006 and 2007, when interest rates were higher, the insurer generated more than $4 billion each year in free cash flow. Since then, lower interest rates have led to a reduction in interest income, to the tune of more than $1 billion annually.

Meanwhile, the insurer’s payout ratio remains quite low. A combination of a move up in the payout ratio and eventually higher interest income will help Travelers keep boosting the dividend at a double-digit pace, which it has done for four-straight years. Frankly, you are likely to find solid dividend growth prospects among many insurers and not just this Dow component.

You’ll also find solid dividend growth prospects among industrial companies. Right now, the chemical industry is in a sweet spot. Lower feedstock prices (oil and natural gas) are enabling key firms to generate impressive levels of cash flow.

For example, Eastman Chemical Co. (NYSE: EMN), which had never generated more than $300 million in free cash flow in its existence, was able to boost that figure to $669 million in 2013, likely had another record year in 2014 and could approach $1 billion in free cash flow this year. Pair that with a low payout ratio and Eastman Chemical appears poised for 15% annual dividend growth in coming years.

Risks To Consider: These companies aren’t Dividend Aristocrats. In times of economic uncertainty, they have shown a willingness to reduce their dividends. When that happens, it is often only for a year or two, before dividend growth resumes.

Action To Take –> Most of the companies in the table above are also in the midst of robust share buyback programs. As a result, they offer compelling Total Yield opportunities. Yet their primary appeal is in their ability to boost dividends at a rate that will keep the payouts above fixed income yields.   

Companies that participate in healthy share repurchase programs might make a great addition to a Total Yield portfolio. Total Yield stocks are shareholder-friendly, dividend-paying companies that judiciously repurchase shares. And those that do these things wisely have proven to beat the market — even during the 2008 financial crisis and the dot-com bubble — and serve as reliable income investments. To find out more about Total Yield investing, click here.