Payouts Rise in Q1, but Some Dividend ETFs Lag

Expected dividend increases to watch for in the coming weeks include those from Dow components Exxon Mobil (NYSE: XOM) and Chevron (NYSE: CVX).

The ability of Chevron and Exxon to continuing raising dividends as oil prices plummet is important because while Wall Street and Main Street have been somewhat tolerant of the companies’ plans to trim exploration and production spending and suspend buybacks, not extending dividend increase streaks would universally be seen as a negative. [ETFs for Upcoming Dividend Increases]

Exxon is the largest S&P 500 dividend payer in dollar terms, having paid out nearly $11.6 billion in dividends on a trailing 12-month basis , according to FactSet data. Only six companies, including Exxon, paid more in dividends over that period than the $7.9 billion paid by Chevron.

Because Exxon and Chevron have lengthy histories of boosting dividends, the stocks are frequently found in ETFs that include dividend increase streaks as part of their weighting methodology. For example, VIG, which requires its holdings to have a minimum dividend increase streak of at least 10 years, features Exxon as a top 10 holding. If Exxon and/or Chevron cannot raise payouts this year, they will be expelled from ETFs that use dividend increase streaks as part of the stock selection criteria. [Bell Tolls for Energy Dividends]

Vanguard Dividend Appreciation ETF


Tom Lydon’s clients own shares of DVY.