Is Enbridge a Great Dividend Stock?
Most dividend investors likely measure the greatness of a dividend stock by how much it currently yields. If that's the case, then Enbridge (NYSE: ENB) would probably rate fairly high given that it yields nearly 6%, which is roughly triple that of the average stock in the S&P 500.
However, a stock's dividend yield should not be the main metric used to measure its greatness. Instead, what matters more is how consistently a company can increase its payout. That's evident in the data. Companies that have grown or initiated their dividends have generated an average total return of 9.6% over the past several decades, according to a study by Ned Davis Research. Those that maintained their payout, on the other hand, only produced a 6.88% total return, which underperformed the S&P 500's 7.3% total annual return over that time frame.
Given that growth is a better measure of dividend greatness than yield, here's how Enbridge stacks up.
Source Fool.com
