One Raise At A Time | Big Oil For Big Dividends

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Getting a pay raise while sitting on the couch?  Sign me up!  Thanks Exxon for yet another dividend increase!
Something I love about dividend growth investing is that each month I get to hear about companies I own deciding to pay me more money in dividends.  Just for owning a small portion of said companies.  Not going and doing R&D for new products or technology.  Not selling any products.  Not managing any employees or inventory.  Not making sales calls.  All I had to do was have the foresight to invest some of my savings in excellent companies.  That's dividend growth investing at work!  I mean who doesn't like getting a raise for doing nothing?  Dividend growth investing is far from a get rich quick investment strategy, rather you need to remain focused on the long term goal to be successful.

On April 25th the Board of Directors at Exxon Mobil (XOM) announced a dividend increase for shareholders.  The dividend was increased from $0.77 up to $0.82.  That's an solid 6.49% increase.  Exxon Mobil is a Dividend Champion with 35 consecutive years of dividend increases.  Shares currently yield 4.22% based on the new annualized payout.

Since I own 70.874 shares of Exxon in my FI Portfolio this raise increased my forward 12-month dividends by $14.17.  This is the 5th dividend increase I've received from Exxon Mobil since initiating a position in 2013.  Cumulatively, the organic dividend growth has totaled a whopping 30.2% over that time.  According to US Inflation Calculator the cumulative rate of inflation over that same time is 7.1%.

A full screen version of this chart can be found here.

With commodity related companies such as Exxon Mobil I expect dividend growth to be a bit choppier from year to year compared to companies with steadier operations.  However, Exxon has done an excellent job consistently raising dividends.  Given the size of Exxon I wouldn't expect to see 10%+ annual dividend growth for an extended time; however, that doesn't mean that 4-8% won't do the job.  

The 1-, 3-, 5- and 10-year rolling dividend growth rates since 1993 can be found in the following chart.  

A full screen version of this chart can be found here.

*2018's dividend assumes the new quarterly payout of $0.82 per share is maintained for the rest of the year.

Wrap Up

This raise increased my forward dividends by $14.17 with me doing nothing.  That's right, absolutely nothing to contribute to their operations.  Based on my portfolio's current yield of 2.96% this raise is like I invested an extra $479 in capital.  Except that I didn't!  One of the companies I own just decided to send more cash my way.  

That's how you can eventually reach the crossover point where your dividends received exceed your expenses.  That's DIVIDEND GROWTH INVESTING AT WORK!  The beauty of the dividend growth investing strategy is that you build up your dividends through fresh capital investment as well dividend increases from the companies you own.

Thus far in 2018 I've received 23 dividend increases from 22 of the companies in my FI Portfolio combining to increase my forward 12-month dividends by $196.14.  

My FI Portfolio's forward-12 month dividends increased to $6,146.88.  Including my FolioFirst portfolio's forward dividends of $79.05 brings my total taxable accounts dividends to $6,225.93.  My Roth IRA's forward 12-month dividends are at $338.52.

Do you own Exxon Mobil or any other "Big Oil" companies?  How do you think Exxon has done navigating the volatile oil and gas environment?

Please share your thoughts below.


  1. Hi JC, I own XOM and was happy with this increase. Nice to see big oil turn it around even though I am paying more at the pump. Tom


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