3 surprising dividend stocks I'm betting on

Spoiler alert: Telstra Corporation Ltd (ASX:TLS) is out and Santos Ltd (ASX:STO) is in. But which two other stocks am I betting on?

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I love the reward of collecting a big dividend cheque.

The extra passive income for little extra work is a great way to grow my portfolio and keep the returns compounding. Happy days.

However the big problem with some of the 'All-Star' dividend-paying companies like Telstra Corporation Ltd (ASX: TLS) is that investors have bid up the underlying share price in order to secure the dividend, making the value of the shares less attractive.

To get around this we can identify those companies which are likely to be strong dividend payers in the coming years and buy them today at cheaper prices, securing both the dividend AND the discounted share price. Here are three surprising companies I think could be set to do just that:

Cover-More Group Ltd (ASX: CVO)

Insurance group Cover-More is surprising mainly because it does not currently pay a dividend. However this is set to be corrected in the near future.

The company has stated its first dividend will be determined based on the first six months of the 2014 calendar year and it could be a good one.

Cover-More has already announced a prospectus-beating pro-forma EBITDA result for the full year of $50.1 million, up 22% on FY13. And this could be just the start as Cover-More expands its commercial travel insurance offerings into China – the world's fastest growing travel market.

Santos Ltd (ASX: STO)

In a similar way to Cover-More, Santos currently underwhelms in the dividend stakes.

This is set to change too as new projects flood the company with cash-flows which are expected to more than double over the next two years.

Some of this will be directed towards paying down debt on its PNG LNG and GLNG projects, but the company has stated it also expects to reward investors with a progressive dividend policy.

Santos could soon be regarded in the same fashion as Woodside Petroleum Limited (ASX: WPL) when it comes to dividends, and buying shares in the company today in anticipation could help to secure future dividends at a lower price.

FlexiGroup Limited (ASX: FXL)

This consumer lending company has the highest dividend yield of the three companies at 4.4%. FlexiGroup grew cash NPAT 18% for FY14 and increased its dividend 14%. This strength not only drives higher dividends, but also capital growth in the company's share price over time.

The consistency of FlexiGroup's cash-flows means it can already provide guidance around FY15 profit and is forecasting NPAT growth of up to 7%.

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