Dividends to set record—10 ways to play

Published Fri, May 1 20158:34 AM EDT

Dividend payments are on pace to set another record in 2015, and a select group of companies is leading the charge. To find a definitive list of the best income investments in the S & P 500, CNBC Pro screened this group to find the ones with the biggest yields and at least two years of consecutive double-digit increments. So far this year, the flurry of dividend payments runs a tab of $377 billion, according to Howard Silverblatt, senior index analyst at Standard & Poor's. That amount is already 7 percent higher than last year's figure at this time of $351 billion. He said S & P companies have posted four-straight years of double-digit dividend increases. According to Silverblatt, dividend payments have been a way for S & P 500 companies to use "record cash reserves" to lure investors into buying stocks despite lackluster revenue figures. Read More The $1 trillion force behind the bull market A low-yield environment may also be a contributor for large companies to provide their shares as an viable option. But once a company sets the tone, investors expect those increases to continue, which is why it's best to find stocks with a steady income track record. With data from Standard & Poor's, we first grouped the stocks that posted at least two-straight years of double-digit dividend increases. Of those firms, we then screened for the ones with the biggest yields and positive returns for the year in order to weed out any stocks that have high yields due to a drop in their share price. Two of the companies that caught our attention are oilfield services company Schlumberger and Valero Energy , which despite a 40 percent drop in oil prices in the past year, managed to boost their dividend payments by a significant amount. So far in 2015, shares of Schlumberger are up 11 percent, while Valero's stock is up 15 percent. Both stocks have dividend yields above 2 percent. Other notable names with large dividend increases include IBM , Cisco and Home Depot , which currently offer yields of 2 to 3 percent. An alternative way to bet on this trend is through exchange traded funds that focus on dividend payments. Two of those ETFs include the SPDR S & P Dividend ETF and the iShares Select Dividend ETF , which pay dividend yields greater than 2 percent. Based on Silverblatt's estimates, if S & P companies manage to post a fifth year of double-digit dividend increases, it would be the first time that's ever happened.

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Dividend payments are on pace to set another record in 2015, and a select group of companies is leading the charge.

To find a definitive list of the best income investments in the S&P 500, CNBC Pro screened this group to find the ones with the biggest yields and at least two years of consecutive double-digit increments.