Dividend Stocks: ConocoPhillips, Raytheon

These companies, including ConocoPhillips and Raytheon, recently increased their dividends.
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BALTIMORE (Stockpickr) -- With the S&P 500 up double digits from early February lows, the biggest question on Wall Street's mind is whether or not the economy is rebounding enough to justify the premium in stock prices. But while big price swings have made many stocks difficult to value, it's been a different story for dividend-paying companies, which get a significant portion of their valuations from the income streams that they pay out to shareholders.

Historically, companies that pay higher 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. And when a company actually increases its dividend, investors would do well to take notice.

With that in mind, here's Stockpickr's latest roundup of recent

dividend-increasers

. These stocks represent some of the most interesting income investments on the market right now.

Integrated oil and gas giant

ConocoPhillips

(COP) - Get Report

spilled the details on its $10 billion divestiture plan last week, a move designed to increase value for shareholders of the $77 billion company. At its March 25 analyst meeting, the company also announced plans to begin increasing its quarterly dividend payouts, starting with a 55-cent-per-share dividend to be paid on June 1 -- a 10% increase.

ConocoPhillips has been making significant strides toward presenting a more attractive package to investors, a move designed to compete with Wall Street's favor of its high-profile peers. Although ConocoPhillips' thinner margins might scare some investors away, its focus on the natural gas side of the business is playing out well for the company in 2010. With corporate actions under way to increase balance sheet liquidity in the next two years, investors should enjoy increasing yields on their investments.

Who Owns ConocoPhillips? Warren Buffett David Dreman Atticus Capital

One fund that's counting on increased income is the

J.P. Morgan Intrepid Value Select Fund

(JPIVX), which also owns stakes in

Pfizer

(PFE) - Get Report

and

Bank of America

(BAC) - Get Report

.

While

Raytheon's

(RTN) - Get Report

competitors in the private jet business suffered under the decreased sales volumes of 2008 and 2009, this company soared thanks to lucrative government defense contracts and a sparkling balance sheet. And with last week's dividend hike to 37.5 cents per share -- a yield of 2.64% -- investors should be even more interested in Raytheon.

Looking back, the $3.3 billion sale of Raytheon's Hawker Beechcraft private jet unit seemed almost too prescient, but like many of the company's moves, it left Raytheon in a stronger financial position with a renewed focus on its core competencies: defense contracting. This year, with a well-diversified contract pool and significant free cash flow, the company's 21% dividend hike should sway investor attention deservedly in Raytheon's direction.

A unique fund that's been a player in Raytheon for a while is the sin stock-focused

Vice Fund

(VICEX), which also owns stakes in

Philip Morris

(PM) - Get Report

and

Altria

(MO) - Get Report

.

While REITs have been increasingly taking heat of late,

Realty Income Trust

(O) - Get Report

is one of the best-in-breed real estate trusts right now -- one that's been designed solely with dividend payments in mind. With a secure 5.65% yield now thanks to last week's modest 0.2% dividend increase, this trust offers significant income in a well-capitalized, secure package.

Realty Income Trust tackled the recession with strong management presence, renegotiating nonperforming leases to ensure consistent income, and maintaining available credit for bargain basement acquisitions. As other REITs saw commercial rental incomes dry up amid a slew of bankruptcy filings, this trust maintained an industry-leading churn rate for its properties and kept the cash flowing in.

Incidentally, that means that it has been able to keep the dividends flowing out every month since 1970 -- with 49 consecutive dividend increases along the way.

For the rest of this week's dividend stocks, check out the

Dividend Stocks portfolio

on Stockpickr.

And if you haven't already done so,

join Stockpickr

today to create your own dividend portfolio.

-- Written by Jonas Elmerraji in Baltimore.

Jonas Elmerraji is the editor and portfolio manager of the

Rhino Stock Report

, a free investment advisory that returned 15% in 2008. He is a contributor to numerous financial outlets, including

Forbes

and

Investopedia

, and has been featured in

Investor's Business Daily

, in

Consumer's Digest

and on

MSNBC.com

.