National Oilwell Varco Inc. (NYSE: NOV) has not just raised its dividend. It has massively raised it. The leader in equipment and components used in oil and gas drilling and production operations has announced that its board of directors approved an increase in its quarterly cash dividend to $0.46 per share.

Last year’s dividend hike went to $0.26 from $0.13, a doubling of the payout. As far as how much this is on the surface, it may not seem as strong because it is not a doubling again, but look at the incremental hike — up by $0.20 rather than $0.13.

What really stands out is that companies raising their dividends by this much are signaling that they are comfortable with their distribution rates for years into the future through ups and downs of the cycle. After all, companies truly hate having to cut their dividends.

National Oilwell Varco shares were down about 1.2% at $80.11 after almost an hour of trading on Thursday, but the 52-week range is $66.01 to $84.71. The prior yield was close to 1.3%, but the new dividend yield based on the current share price will jump up to 2.3%.

This new $1.84 annualized per share payout compares to earnings estimates of $6.12 per share in 2014 and $6.87 in earnings per share in 2015. In short, future dividend hikes also seem likely.

CEO and President Clay Williams said:

This dividend increase demonstrates the Company’s strong financial condition and the confidence we have in our future. The Company’s strength in execution has resulted in a very strong cash flow that has enabled us to pass this dividend increase of over 75% directly to our shareholders. Even with this increase, our business model generates sufficient operating cash flow to allow future investment in strategic internal growth and acquisitions that will further strengthen our existing businesses.

READ MORE: Why the AmEx Dividend Hike Is Still Too Low

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