Twelve companies last week raised distributions. While this is positive news in comparison to the avalanche of dividend cuts that were occurring just a few months ago, it is important that investors dig deeper into the numbers before they find out the next big thing.

The initial screening criteria for investigating whether recent dividend increases are worth your time should focus on fundamentals such as earnings per share growth and dividend payout ratio. Next, investors should focus on number of years of consecutive dividend increases as well as adequate starting dividend yield.

It is a well-documented fact that a significant portion of the historical equity returns are a result of reinvested dividends. In Triumph of the Optimists: 101 Years of Global Investment Returns (2002), the authors looked at equity returns from capital gains and dividends from 1900 to 2000. They determined that performance in any given year was driven by capital appreciation, but long-term returns were largely the result of reinvested dividends.