This Top Dividend Stock Just Hiked its Payouts by 10%

Enbridge Inc (TSX:ENB)(NYSE:ENB) raised its divided yet again as it announced that its dividend payments would be rising by as much as 10%. Although it may seem like a surprising move given the challenges that the oil and gas industry has faced, Enbridge raised its dividend around the same time last year, and the company has a strong track record for increasing its payouts over the years.

Five years ago, the company was paying its investors $0.35 a share. Since then, payouts have more than doubled and Enbridge will now be distributing $0.738 per share, an increase of more than 110%, for a compounded annual growth rate of more than 16%.

Enbridge is a great example of a dividend stock that just keeps on giving. The beauty of a great growing dividend like this is that investors that hold on to the stock will be earning much more in the years to come. While its dividend may be around 7% today, if you hold onto the stock for five years you could be earning 14% or more on your initial investment, assuming the stock continues to increase its payouts at its impressive rate.

However, it’s important to note that there’s no guarantee that that will happen or that Enbridge has any obligation to continue paying a dividend. But given its track record and commitment to improving its payouts, it would likely take something significant for the company to make such a drastic move. Enbridge could be a great buy not only for its dividend, but also because the stock is trading at very modest multiples and could produce significant returns for investors that buy today.