3 Dividend Stocks for Your Watchlist in 2014

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There's no magic fix for low interest rates these days. But adding dividend-producing stocks might be your best bet. These three companies may not boast the highest dividend yields around, but they're certainly worth watching in 2014.

Automatic Data Processing's dividend yield recently hit 2.5%. The payment processing company raised its dividend more than 10% this year and 45% during the past five years. During the recent recession, layoffs hurt the world's largest payroll-processor. But as the employment market recovers, it will buoy ADP. The use of third-party companies that perform payroll processing and human resources functions will likely grow as the complexity and accountability of managing in-house human resources has increased. With around 90% recurring revenue, this consistency allows ADP to pay -- and raise -- its attractive dividend. In fact, ADP has increased its dividend every year since 1974.

McCormick recently yielded 2%. The world's largest spice company raised its dividend more than 8% this year and has grown its dividend more than 54% over the past five years. In fact, McCormick has raised its dividend for 28 consecutive years. And with a payout ratio of 44%, the company has plenty of room to continue to grow its dividend. Innovation is what keeps this 124-year-old company going. McCormick has been leading the spice and seasonings industry by introducing new products, including ethnic and organic spices. Its new products tend to have higher growth rates and profitability. As McCormick's margins grow, it'll give the company more leeway to increase its already appetizing dividend.

Coleman Cable pays a dividend that's shy of 1%.  But don't let the modest dividend fool you -- the company has grown its dividend 150% this year! And sporting a mere 11% payout ratio, the dividend still has lots of growth potential. The Illinois-based company designs, manufactures, and supplies electrical wire and cable products for consumer, commercial, and industrial applications. You might think the maker of wires and cables seems like a stodgy, slow-growing company. But its stock is up 150% so far this year. Coleman recently unveiled record third-quarter earnings results. Without a doubt, the company has benefited from the recent construction and housing-market recovery. The future looks promising for this up-and-coming dividend stock.

More compelling dividend stocks
Do you love dividend stocks? They can make you rich. While they don't garner the notoriety of highflying growth stocks, they're also less likely to crash and burn. And over the long term, the compounding effect of their quarterly payouts, as well as their growth, adds up faster than most investors imagine. With this in mind, our analysts identified nine rock-solid dividend stocks in this free report. To discover the identities of these companies before the rest of the market catches on, you can download this valuable free report by simply clicking here now.

The article 3 Dividend Stocks for Your Watchlist in 2014 originally appeared on Fool.com.

Fool contributor Nicole Seghetti owns shares of Automatic Data Processing. Follow her on Twitter @NicoleSeghetti. The Motley Fool recommends Automatic Data Processing. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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