Dividend Stocks for the Week

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By Jonas Elmerraji

BALTIMORE (TheStreet) -- Last week, several funds and stocks raised their dividends, a shift from the sparse dividend increases of the previous two weeks. Increasing a dividend is a big deal for any company, but it's a particularly significant event in the midst of a recession. Dividends are so significant because historically companies that pay dividends materially outperform those that don't, and when the market turns bearish, dividends could be the only semblance of return that investors see for a while.

That's why every week Stockpickr reviews recent dividend declarations and compiles a portfolio of dividend-increasers. These stocks represent some of the most enticing investments on the market right now.

Some familiar names increased their payouts last week, including Philip Morris International(PM Quote), the international tobacco company that spun off from Altria(MO Quote) last year. Philip Morris, which consists of many of Altria's international tobacco holdings, operates in 160 countries. The company raised its dividend by 4 cents per share, bringing its yield to 4.8%.

The dividend hike comes as a double whammy for PM shareholders, many of whom turned to the cigarette stock because of its "sin stock" status. "Sin stocks," which include tobacco, alcohol and gambling companies, are known for high margins and recession resistance and are especially popular when economic times are tough.

Funds are fond of PM -- holders include the five-star rated Bread & Butter Fund (BABFX) and the Vanguard 500 Index (VFINX). The Vanguard index fund also owns dividend-payer Johnson & Johnson(JNJ Quote), which sports a 3.2% yield, and Coca-Cola(KO Quote), with a 3.1% yield.