Exxon Mobil (NYSE: XOM) announced today that it’s increasing its dividend 21% – a show of faith that oil prices will continue to remain high for quite some time.

The big oil company is upping its quarterly dividend from 47 cents to an all-time high of 57 cents a share. That equates to $2.28 per year, and a dividend yield of just over 2.6% at the moment. That brings Exxon’s dividend closer to rival Chevron’s (NYSE: CVX) 3.2% yield and $3.24 annual dividend.

European companies Royal Dutch Shell (NYSE: RDS-A) and BP (NYSE: BP) are the most generous dividend payers among big oil companies, each with yields of more than 4%.

Considering that Exxon’s $409 billion market cap dwarfs all those other companies’, they were long overdue for a dividend hike. The last time Exxon upped its dividend was a year ago. The 57 cents a share still trails some of its smaller rivals’ dividend offerings. But it’s an improvement, and was higher than the 15% increase analysts were predicting.

The announcement didn’t make much of a dent in Exxon’s stock price, as shares gained only 0.6% today.  With the stock only up 2.5% for the year, however, today’s move actually amounts to a fairly sizable gain.

Today’s dividend announcement was a nice appetizer to tomorrow morning’s main course: Exxon’s first-quarter earnings announcement.  Expectations are not high: analysts are projecting lower profits and lower production thanks in part to rapidly growing natural gas production.

Exxon is expected to earn $9.79 billion, down from $10.65 billion a year ago.

Published by Wyatt Investment Research at