Companies Increase Dividends: ETFs To Play

by on May 1, 2013 | ETFs Mentioned:

The first quarter of 2013 earnings season has taken over the headlines, with several bellwethers reporting both hits and misses. Of the trends seen so far this season, firms missing revenue expectations seems to be a predominant one; many companies have beaten profits not because revenues are up, but because costs have decreased. However, some firms have surprised investors and analysts alike by significantly increasing dividend payouts [see What Can You Buy With Apple's Cash?].

For those investors looking benefit from the slew of rising dividends, we highlight several companies have increased payouts and which ETFs to play:

MLPs Shell Out Higher DividendsIncreased Dividends

Investors may want to take a closer look at MLP ETFs, as several of the funds’ top holdings have announced dividend increases [see How To Find The Best MLP ETF]:

  • Atlas Pipeline Partners LP (APL): This company raised its annual payout from $2.32 to $2.36 per share. The Junior MLP ETF (MLPJ, B-) is currently the only fund that offers exposure to APL.
  • Alliance Resource Partners L.P. (ARLP): ARLP raised its payout by $0.09, making its annual divided payout per share $4.52. MLPJ gives this company a weighting of nearly 6%, while the Yorkville High Income MLP ETF (YMLP, A-) allocates 5% to the stock.
  • Atlas Energy L.P. (ATLS): This company raised its annual dividend from $1.92 to $2.04 per share. Currently, only YMLP offers exposure to ATLS.
  • Breitburn Energy Partners L.P. (BBEP): BBEP raised its payout by $0.02, making the new dividend yield (based on current prices) roughly 9%. YMLP allocates nearly 5% to the stock.
  • Energy Transfer Equity L.P. (ETE): This firm increased its annual dividend payout from $2.54 to $2.58 per share. The Yorkville High Income Infrastructure MLP ETF (YMLI, A) is the only fund that offers exposure to ETE.
  • Magellan Midstream Partners (MMP): MMP increased its dividend payout by $0.03. The popular Alerian MLP ETF (AMLP, A-) and the MLP ETF (MLPA, A+) offer exposure to the stock.

Financial Equities Boost Payouts

A number of financial companies have also increased annual dividend payouts:

  • Metlife (MET): This insurance giant announced an annual dividend payout increase from $0.74 to $1.10 per share. The Dow Jones U.S. Insurance Index Fund (IAK, B+) and the KBW Insurance Portfolio (KBWI, C+) both allocate between 7% and 9% to the stock.
  • Lazard Ltd. (LAZ): This asset management firm increased its divided by $0.20. The KBW Capital Markets Portfolio (KBWC, C+) is currently the only fund that offers exposure to LAZ.
  • Legg Mason (LM): LM increased its dividend payout from $0.74 to $1.10. The SPDR S&P Capital Markets ETF (KCE, B-) and the S&P Equal Weight Financial ETF (RYF, B+) allocate 2.8% and 1.3% to the stock, respectively.
  • Travelers Companies Inc (TRV): Another popular insurance company, TRV announced that it will now pay a $0.50 dividend. Several ETFs offer exposure to the stock, including KBWIKBWPIAK and DIA.
  • Wells Fargo & Co (WFC): This mega-bank announced that it will increase dividends from $0.25 to $0.30. There are numerous ETFs that make allocations to WFC, including IYGXLFRKHKBWB, and VFH.

Other Big Names Raising Dividends

  • Apple (AAPL): This mega-tech company announced a 15% dividend increase. Several ETFs allocate more than 10% to AAPL, including VGTIYWXLK and QQQ.
  • Chevron (CVX): This oil giant increased dividends from $0.90 to $1.00 per share. Dozens of funds offer exposure to CVX, with XLEIYE and VDE allocating more than 12% to the stock [see Monthly Dividend ETFdb Portfolio].
  • Johnson & Johnson (JNJ): JNJ raised its annual dividend payout from $2.44 to $2.64 per share. Popular ETFs that have JNJ in their top holdings include XLV,  IYHPPH, and VHT.

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Disclosure: No positions at time of writing.