Abbott has a 22-year history of dividend growth. The last increase was 9% last May to a $1.92 annual rate. The company is guiding for 2012 earnings that will exceed $5 a share and provide better than two-fold coverage of the dividend. Both Abbott and Abbvie will pay a dividend, with payout being split between the two.
2. ConocoPhillips (COP)
ConocoPhillips is spinning off its refining & marketing business as Phillips 66, an already well-known brand. Shares of Phillips 66 (PSX: NYSE) will be distributed on April 30, with current shareholders receiving one share of Phillips 66 for every two shares of ConocoPhillips currently owned.ConocoPhillips has long been a favorite of dividend investors for its 13% yearly dividend growth and yields that have consistently exceeded 3% in the last five years. Going forward, the company intends to pay out 20% to 25% of cash flow as dividends every year. That means dividends may rise to $4 billion this year from $3.6 billion last year. ConocoPhillips also plans to make $10 billion in share repurchases, which will reduce the share count and further enhance dividend growth per share. Phillips 66 has a similar commitment to dividend growth. This company will pay a 80-cent annual dividend and plans to grow payments by 5% a year. The initial dividend is roughly 20% of Phillip's annual cash flow and very affordable. Phillips shares began trading in mid-April in a $35-to-$36 price range and have a 2.3% yield.