At the end of the second quarter, there had been about 230 dividend increases from S&P 500 members this year and 422 members of the benchmark index that now pay cash dividends, up from 418 at the end of last year, according to S&P Capital IQ.
“Companies in the S&P 500 Index will increase dividends paid to investors this year by 12.3 percent to a total of $323 billion,” reports Adam Johnson for Bloomberg, citing Strategas Research Partners founder Jason Trennert.
For the first time, global dividends topped $1 trillion ($1.03 trillion to be precise) last year. U.S. stocks were big factors in that equation with S&P 500 payouts soaring to record of nearly $312 billion. Even with that impressive showing and what has been seen on the dividend front through the first nine months of this year, investors should expect some payout hikes from some big-name U.S. companies before the end of this year. [Dividend ETFs Still Popular]
Of course, there is an ETF for that. Several in fact, but when looking at companies that appear destined to increase their dividends sometime over the next three months, the PowerShares S&P 500 High Dividend Portfolio (NYSEArca: SPHD) standouts as being home to multiple companies that are likely to raise payouts before yearend.
Screening for S&P 500 members with current dividend yields of 3% and likely to hike dividends by year end, Bloomberg turned up well-known names, such as Dow components AT&T (NYSE: T) and General Electric (NYSE: GE) as well as Kraft Foods (NasdaqGS: KRFT) and Sysco (NYSE: SYY). SPHD, which pays a monthly dividend, allocates a combined 8.1% of its weight to that quartet. [Monthly Dividend ETFs]
Though it should be used in unison with other evaluation tools and metrics, a stock’s track record of dividend increases can be a sign of things to come. On that, SPHD looks all the more appealing because AT&T and SYSCO are members of the S&P High Yield Dividend Aristocrats Index, which mandates 25 years of dividend hikes for entry. To its credit, GE has shown renewed dividend commitment following a payout cut during the financial crisis.