Southwest has a lengthy history of paying dividends, but the 2012 increase to a paltry penny per share per quarter was the company’s first dividend hike since 2001.
By comparison, Union Pacific (NYSE: UNP), IYT’s largest holding with a weight of 14.2%, has raised its dividend 800% since 1998 to 91 cents a share per quarter from 10 cents a share.
That is to say transportation ETFs have a long way to go to become dividend ETFs. After all, the average trailing 12-month yield on IYT and XTN is 0.75%. However, the recent airline buyback and dividend announcements have been positive catalysts for the ETFs.
iShares Transportation Average ETF
ETF Trends editorial team contributed to this post.