Exxon Mobil (NYSE: XOM) quashed speculation that falling oil prices are endangering its dividend. On Wednesday, the Dow component and the largest U.S. oil company said it will raise its quarterly dividend to 73 cents per share from 69 cents.
Following intense fear that last year’s tumble in oil prices would force Exxon to do the unthinkable, the unthinkable being to not boost the payout, the Texas-based company extended its dividend increase streak to 33 years and that is enough to keep the stock in some well-known dividend exchange traded funds. [Oil Dividends: Sort of Safe]
With a dividend increase north of 25 years, Exxon is a dividend aristocrat, meaning it would have faced expulsion from the ProShares S&P 500 Aristocrats ETF (NYSEArca: NOBL) had it not raised its dividend. [Bell Tolls for Energy Dividends]
That is nothing to scoff at. NOBL is just 18 months old, but the ETF is already home to nearly $720 million in assets. Said another way, NOBL is clearly one of the most successful dividend ETFs to come to market in the past two years and it would not be considered a badge of honor to be expelled from the fast-growing fund. That would be more like a scarlet “A.”
NOBL is also home to Exxon rival Chevron (NYSE: CVX), which is now unlikely to forego is own impressive dividend increase knowing that investors are expecting to keep step with Exxon. Over the trailing 12 months, only six companies, including Exxon, paid more in dividends over that period than the $7.9 billion paid by Chevron.
Exxon extending its dividend increase streak also means it remains a member of the $348.6 million PowerShares Dividend Achievers Portfolio (NYSEArca: PFM), an ETF that requires dividend increase streaks of at least 10 years.
At a weight of almost 4%, Exxon is PFM’s second-largest holding. Chevron, at a weight of 3.1%, is PFM’s seventh-largest holding.
Interestingly, when we initially covered in late February the issue of Exxon’s payout as it relates to dividend ETFs, the stock was the seventh-largest holding at a weight of 3.3% in the Vanguard Dividend Appreciation ETF (NYSEArca: VIG). However, VIG, the largest dividend ETF by assets, no long features Exxon among its 182 holdings, according to Vanguard data.
ProShares S&P 500 Aristocrats ETF