Financial sector stocks were the well-publicized whipping boys of the 2008 financial crisis. The sector overall has recovered only slightly from its early 2009 lows and has remained essentially flat since then. Two major risks-neither perfectly quantifiable nor predictable-hang over the sector at this time.

One is the housing crisis; potential issues here range from the ultimate size of write-downs of mortgage-backed securities to litigation over the issuance of those securities to a housing market that remains depressed with no encouraging signs. The lack of a recovery in home prices decreases the recovery lenders can expect on defaulted mortgages and increases the amount of time foreclosed properties linger unsold. The foreclosure process itself is in question because of the “robo-signing” scandal, though some banks have availed themselves of a large-scale settlement with various state attorneys general.

The other is the European debt crisis. The journey toward a solution has been slow and painful, and questions remain about economies like Italy, Spain, and even France that would pose a much more substantial danger to the European and global economies than Greece. The unfortunate fact is that this crisis is unlikely to be satisfactorily resolved in 2012.

Bearing in mind this shared economic landscape, we’ll consider the likelihood that six financial services stocks will increase their dividends in 2012.

JPMorgan Chase & Co. (JPM) currently has a dividend yield of 2.69%, a payout ratio for the trailing twelve months (TTM) of 22.0, and dividend growth (over five years) of ‒5.96%. To continue reading, click here.