The market has surged and plunged during the past two years, but two things have remained constant. Companies continue to generate lots of cash. And lacking any real options to re-invest that cash back into their business, they’re hiking or initiating new dividends at a rapid rate.

According to data compiled by Standards & Poor’s, 237 companies in the S&P 500 have hiked dividends so far this year, while 17 have offered up dividends for the first time (or at least reinstated them after a several-year hiatus). The list of the 237 is the largest in at least seven years (which is as far back as the data go). This figure stood at 109 in 2009, and 177 in 2010. And 2011 isn’t even over yet…

Some companies aren’t just boosting their dividends — they’re super-sizing them, hiking dividends by 100% or more from 2010 levels. Here are 24 of them.

You’ll notice that there are a number of bank stocks on the list. It’s no coincidence. Many banks stocks needed to keep their dividends quite low until they rebuilt their capital bases to meet new stricter required minimums. Look for big dividend hikes from banks like Citigroup (NYSE: C) in 2012, while industrial firms such as Ford Motor (NYSE: F) have announced plans to get back into the dividend game in 2012 as well.

#-ad_banner-#Of course, a big dividend hike doesn’t mean a fat payout. Some dividend yields were so small to begin with that a big boost still won’t bring in the income-seeking crowd. For example, the dividend was doubled at apparel maker Ralph Lauren (NYSE: RL) though it was solely aimed at returning more cash to the company’s eponymous founder. (This is what his dividends pay for…)

For many of these companies, there’s ample reason to expect continued aggressive moves on the dividend front. That’s because the current payout is just a fraction of their free cash flow. For example, United Healthcare (NYSE: UNH) paid a paltry $0.03 a share annually throughout most of the last decade, hiked it to $0.41 a share in 2010, boosted it again to $0.65 a share this year, and could actually take it up past $2 a share by my calculations and still leave plenty of funds left. This would turn a 1.3% current yield into a 4% yield.

In a similar vein, satellite TV provider DirecTV (NYSE: DTV) is rumored to be contemplating a first-ever dividend in 2012. With almost $3.5 billion in annual free cash flow, let’s assume the company looks to pay out 40% of its free cash flow into a dividend or $1.4 billion. This equates to around $1.60 a share, which would be good for a 3.8% yield.

Other companies that are increasingly committed to dividend growth include:

• Guess? (NYSE: GES) — has boosted its dividend at least 25% a year during each of the past four years. Current yield: 2.4%
   
• PetSmart (NYSE: PETM) — has nearly quintupled its divided in the past four years. Current yield: 1.2%
   
• Church & Dwight (NYSE: CHD) — after hiking its dividend more than 30% in 2009 and 2010, it has more than doubled it this year. Current yield: 1.5%
   
• AmerisourceBergen (NYSE: ABC) — 2011 marks the fifth straight year the dividend has been boosted at least 40%. Current yield: 1.2%
   
• Ross Stores (NYSE: ROST) — boosted its dividend at least 23% every year from fiscal (January) 2003 to fiscal 2010 (with the exception of fiscal 2007 when it only rose 16%). In fiscal 2011, the dividend was boosted another 43%, and was hiked in the current fiscal year another 26% to $0.88. The current yield: 1.1%.

If these companies keep it up, they’ll eventually be offering up some hefty yields. But who are the yield kings RIGHT NOW? Well, these are the top 15 yielders in the S&P 500…

 

Of course, a very high yield should raise a key concern: Why aren’t investors snapping up these stocks (which would presumably push the yield back down as the stock price rises)? The answer lies in the health of their business. At the top of the list you’ll find telephone companies that may not have a long-term survival plan in a world dominated by wireless phone companies and cable/Internet operators. You might say the same for tobacco vendors such as Altria (NYSE: MO) and Reynolds American (NYSE: RAI). In effect, investors don’t trust that these dividends will be around in the future.

It may be wiser to go with high-yielding bank stocks such as Cincinnati Financial (Nasdaq: CINF) or Hudson City Bancorp (Nasdaq: HCBK). Utility Integrys (NYSE: TEG) offers up a respectable 5.5% yield, and although it has barely risen in the last five years, at least it’s quite safe.

Risks to Consider: Dividend payments don’t get quite as much support in a weak economy. Roughly one-sixth of the companies in the S&P 500 reduced or eliminated their dividends in 2009 — the highest level in several decades. Only four companies have done this so far in 2011, but any sharp economic slowdown would likely accelerate the level of dividend cuts or eliminations.

Action to Take–> If you’re looking for tomorrow’s high yielders, then the list above is a good place to start. Keep in mind: many companies in the S&P 500 are boosting their dividends and buying back stock. So dividend yields may not seem as robust as they were back in the 1970s, but the potential total return to investors (when shrinking share counts are included in the calculus) is still quite impressive.