Lengthy dividend increase streaks are appealing to income investors, but it pays to remember that streaks reflect something that's already occurred. They're not future projections.
Even some companies that were once Dividend Kings, or those firms with payout increases in at least 50 consecutive years, have turned into dividend offenders. As one example, 3M cut its payout in 2024, ending a 64-year streak.
ExxonMobil nearly became a dividend offender in 2020. Image source: Getty Images.
One way of interpreting the end of a long run of boosted dividends is that no company is immune from joining that dubious club. ExxonMobil (XOM +0.29%) nearly gained entry into that infamous group in 2020, threatening what was, at the time, a dividend-increase streak spanning more than three decades.
Since 2020 was the year in which the oil giant's dividend was most recently vulnerable to negative action, the obvious culprit was the COVID-19 pandemic. Due to significant demand destruction, there was a brief period in 2020 when U.S. oil prices were negative, prompting doom-and-gloom scenarios for oil majors and their dividend-enthused shareholders.
To its credit, Exxon averted dividend disaster at a time when some of its rivals did not. Both BP and Shell were among oil majors that cut payouts, citing the pandemic. For Shell, it was the first time the company had trimmed its dividend since World War II.
In 2020, Exxon CEO Darren Woods acknowledged that the payout is "sacrosanct," pledging to emphasize a "reliable dividend" policy as the company worked through the effects of the global health crisis.
NYSE: XOM
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Those efforts have paid, well, dividends because Exxon's payout increase now spans 43 years, and the company has adopted a policy of modest, though steady, annual increases that can keep the streak alive without straining the balance sheet.
For the energy sector history buffs out there, Exxon does have a strike on its dividend record. In the first quarter of 1975, the company delivered a payout of $0.30 below the prior quarter, amid the global energy crisis.
