BALTIMORE (Stockpickr) -- While the disconnect between fundamental performance and share prices continues to be a drag on stock market returns this quarter, some companies are taking matters into their own hands in June, hiking their dividend payouts to increase total returns shareholders are seeing. The dividend payouts are substantial right now -- and it's another reason to take a closer look at dividend stocks right now.

Last week, I mentioned the fact that even though the recent selloff had essentially brough the S&P 500 to break-even for the year, consistent dividend payers in the S&P were actually looking at annualized 7.35% total returns in 2011 when payouts were factored in. That's proof positive that dividend payers aren't relegated to boring income portfolios -- historically, they provide statistically significant outperformance.

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How significant? Over the last 36 years, dividend stocks outperformed the rest of the S&P 500 by 2.5% annually, and they outperformed nonpayers by nearly 8% every year, all while paying out cash to their shareholders, according to a study from NDR. The numbers are even more compelling when looking at companies that consistently increase their payouts.

That's why each week, we take a look at the stocks that declared dividend increases the previous week. Here's a look at some of several stocks from our list of recent dividend-increasers.

Chesapeake Energy

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Natural gas exploration and production company Chesapeake Energy ( CHK - Get Report) is facing some auspicious tailwinds now that commodity traders' sentiment is starting to swing in favor of increased natural gas prices in the latter half of 2011. Nat gas prices have remained relatively stagnant this year compared to volatile crude prices. Despite yesterday's weakness in crude, the general consensus remains that high oil prices will translate to greater demand for natural gas -- if that's the case, Chesapeake would be a major beneficiary.

In the mean time, investors are benefitting from the stock's 16.6% dividend increase last week. The move brings Chesapeake's dividend to 8.75 cents per share. Chesapeake lays claim to more than 13 million acres of properties that can generate a mix of natural gas and oil -- the company has been skewing its focus onto those that have more liquid in-ground to adapt to the relative strength in oil compared to its core nat gas business. As a short-term strategy, it's probably a wise one.

Because Chesapeake is more aggressive than most peers (both financially and operationally), the company hit some difficult times back in the depths of 2008's recession as its leveraged balance sheet and seized credit market left it with limited financing options. While management was able to get creative to solve the company's cash shortfall, a future cash flow problem could put the squeeze on the company's dividend.

Chesapeake, one of the top holdings of T. Boone Pickens' BP Capital, shows up on recent lists of 11 Energy Stocks Hedge Funds Love and 2 Natural Gas Stocks to Buy.

American Water Works

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American Water Works ( AWK - Get Report), one of TheStreet Ratings' top-rated water utility stocks, is a good example of the idea that dividend stocks statistically provide better capital gains than their nonpaying brethren. Shares of this $5.2 billion water utility have rallied more than 16% year-to-date despite softness in the market.

While the 4.5% dividend hike declared last week makes AWK the smallest percentage-increase of the week, the company's current 3.13% yield makes the smaller increase more than justified.

As the country's largest public water utility, American Water Works is a unique way to get exposure to high-yielding utilities without any exposure to the energy business. The vast majority of AWK's operations are regulated legal monopolies -- the balance frankly aren't appealing enough for potential competitors to spend massive capital outlays on only to play second fiddle to American Water Works.

The capital outlays are a conspicuous element of AWK's balance sheet. Due to its sizable infrastructure network, the company carries a large debt load. While major obligations are a bit of a concern for shareholders, the company's cash flow generation skills and utility status mean that this name is a solid alternative for income investors looking to get away from the typical energy providers.

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Pet products retailer PetSmart ( PETM), one of TheStreet Ratings' top-rated specialty retail stocks, has found success in its big-box pet store model. The company currently operates more than 1,000 stores that cater to the needs of Americans' pets, from pet food and toys to grooming and even veterinary services. A 12% dividend hike in PetSmart puts the company's current payout at 14 cents per share right now.

One of the most attractive aspects of PetSmart's business is its product mix. Because more than half of sales are generated by consumables, the company has a recurring revenue stream that's largely immune from recessionary pressures. While a minute portion of revenues comes from actual pet sales, those pets are a big driver of traffic into stores -- and more important, a driver of the firm's hard goods sales.

PetSmart currently enjoys strong margins in the retail space, buoyed largely by its ability to effectively compete with peers who can't offer the same breadth of products and services in one location. With a strong balance sheet position in 2011, expect the firm's push for dividend payout increases to continue.

PetSmart is one of the top-yielding specialty retail stocks.

John Wiley & Sons

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Book publisher John Wiley & Sons ( JW.A - Get Report) ( JW.B - Get Report) has been under pressure from both customers and investors in recent years, as fears that physical books will go the way of the newspaper become more founded. Still, the company has managed to adapt, offering eBook alternatives that are delivered instantly and can be read on millions of devices.

While the eBook business is necessary for Wiley, it's hardly a positive change. Because other firms (such as Amazon ( AMZN) and Apple ( AAPL)) own the distribution networks, Wiley is largely beholden to them for its margins. But that doesn't mean you should ignore this publisher.

The content Wiley provides remains important, particularly in higher-margin scientific and technical publications, as well as in trade and professional books where Wiley owns the content distribution channels for electronic versions. While it's unlikely that mass market retail book publishing will be going anywhere, it's also unlikely that it'll get any sort of a shot in the arm from the eBook business. Wiley's real crown jewel comes in the form of its more nuanced offerings -- and management knows it.

As a result, Wiley has been able to perform fundamentally in 2011, with a double-digit climb in share prices and now a 25% dividend increase last week. The dividend action brings Wiley's total payouts to a quarterly 20 cents per share.

One big bullish bet on Wiley comes from Glenn Greenberg's Brave Warrior Capital, which initiated a new 2.8 million-share position in the stock in the first quarter.

Host Hotels & Resorts

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Upscale hotelier Host Hotels & Resorts ( HST - Get Report) claims the title of the biggest dividend increase last week, a 50% jump to 3 cents per share. In part, a big reason for the company's ability to increase payouts so much is that it was so small to begin with; even now, a dividend yield of 0.30% is little reason to consider shares in and of itself. But that doesn't mean this stock's investment case should be ignored.

Because of its REIT status, Host is obligated to pay out the vast majority of its income as a distribution to shareholders. While the company was better situated than peers during the height of the recession, its upscale positioning meant that the business still got hit hard. While upscale properties did see a sizable increase in 2009, investors shouldn't forget that the increase came on already discounted high-end room rates, squeezing margins and hammering profitability.

Host has made some major fundamental improvements in the last year, but I still don't like the tenuous nature of its margins. I'd suggest waiting for improved earnings -- and dividend payouts -- before becoming a buyer of this stock.

Host shows up on a recent list of 8 Hotel and Resort Stocks With Upside

To see these dividend plays in action, check out the Dividend Stocks for the Week 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.


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At the time of publication, author had no positions in stocks mentioned.

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