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We’re already a month into 2016 and things have been quite rocky. The S&P 500 is down 5% for the year and there’s a lot of uncertainty for what 2016 holds.
However, it appears that stocks that are steadily upping their dividends continue to outperform. Consider the SPDR S&P Dividend ETF (NYSEArca: SDY), which features a portfolio of companies that have a track record of dividend increases.
The SDY fund is only down 2% so far this year, versus the 5% loss for the S&P 500. It owns the likes of Chevron (NYSE: CVX) and AT&T (NYSE: T). Plus, the dividend yield for the SPDR S&P Dividend ETF is 2.5%, while the S&P 500 offers just an aggregate 2% dividend yield.
Dividends can make a big difference in investors’ portfolios. The S&P 500 is up just 51% over the last five years, but if you include dividends it is up 68%.
With all that in mind, here are the top five dividend increases for February:
No. 1 February Dividend Increase: Valero Energy (NYSE: VLO)
This month Valero is upping its quarterly dividend by 20% to $0.60 a share. It has upped its annual dividend for five straight years.
The refining company is paying a 3.6% dividend yield. It’s paying out just 27% of earnings via dividends. The stock is up over 30% for the last year thanks to low gas prices, which are spurring more gasoline demand.
Valero has a stronghold on the Gulf Coast, where the supply of light crude is expected to grow thanks to pipeline buildouts. This type of oil goes for a discount compared to heavy crude oil, giving Valero a unique advantage.
Shares trade ex-dividend Feb. 5.
No. 2 February Dividend Increase: Boeing (NYSE: BA)
Boeing is offering a 3.7% dividend yield. Later this month it’s upping the quarterly dividend by 20% to $1.09 a share. Boeing has upped its annual dividend for four years in a row.
The airline maker has a backlog of nearly 6,000 commercial aircrafts, giving the company impressive viability when it comes to cash flows. The strong air travel market will remain a positive for Boeing. Then there’s its exposure to the defense industry, which should prove to be a positive as U.S. spending increases.
Shares trade ex-dividend Feb. 10.
No. 3 February Dividend Increase: Amgen (NASDAQ: AMGN)
Amgen is upping its quarterly dividend by 26% later this month to $1 a share. The biotech stock is offering a 2.6% dividend yield and has upped its annual dividend for five straight years.
Amgen has a number of drugs scheduled to launch this year, plus other promising drugs in early stages. It also plans to launch five biosimilar products in 2019, which will benefit from its strengthening manufacturing process.
Trading at less than 13 times next year’s earnings estimates, it’s one of the cheapest biotech stocks around.
Shares trade ex-dividend Feb. 11.
No. 4 February Dividend Increase: Delphi Automotive (NYSE: DLPH)
Delphi is increasing its quarterly dividend by 16% this month to $0.29 a share. Shares of Delphi are offering a 1.7% dividend yield and its payout ratio is just 22%.
This auto parts company focuses on key auto markets, including the safety, electronics and engine management segments. Delphi has improved markedly since its 2005 bankruptcy with the help of product technology advancements. The next key growth angle for Delphi is in emerging markets, where it has a global manufacturing system to help take advantage of a growing market for autos.
Shares trade ex-dividend Feb. 12.
No. 5 February Dividend Increase: Moody’s Corp. (NYSE: MCO)
Moody’s is offering a 1.7% dividend yield. It’s upping its quarterly dividend by 9% this month to $0.37 a share, which marks the sixth year of annual dividend increases. Its dividend is only a 32% payout of earnings.
The beauty of Moody’s is its credit rating business, which has strong barriers to entry and provides the company with a solid economic moat. Moody’s also has its analytical services business that should continue to grow with the help of overseas market developments.
Moody’s will trade ex-dividend on Feb. 17.
For more dividend stocks that consistently raise their payouts, click here.