Dividend stocks can be terrific investments. In addition to generating dividend income, they have historically produced strong total returns. The average dividend stock in the S&P 500 has delivered a 9.2% average annual total return over the last 50 years compared to a 4.3% return for nonpayers, according to data from Hartford Funds and Ned Davis Research.
Enbridge (NYSE: ENB) and Mid-America Apartment Communities (NYSE: MAA) are great dividend stocks to double up on right now if you already own them or buy if you don’t. The companies have excellent track records of growing their dividends and shareholder value.
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Enbridge is a dividend-paying machine. The Canadian pipeline and utility operator has paid dividends for over 69 years while growing its payout for 29 in a row. The company currently offers a generous dividend yield of 6%, well above its average over the past 10 years. It has generated a robust total shareholder return, averaging 11% annually since 2004.
Enbridge has plenty of fuel to continue growing shareholder value in the future. It expects to increase its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) by 7% to 9% annually through 2026, fueled by expansion projects and acquisitions, including the recently closed purchase of three gas utilities. That should drive 3% annual cash flow per share growth, slowed down by a higher share count to fund its recent acquisitions and some modest headwinds from tax legislation. Post-2026, the company expects to settle into around a 5% annual growth rate for adjusted EBITDA and cash flow per share, driven by its extensive pipeline of expansion projects and ample excess annual investment capacity.
With its dividend yielding 6% and cash flow per share growing by 3% to 5% annually in the future, Enbridge should have the fuel to produce double-digit annual total returns.
Mid-America Apartment Communities (MAA) currently pays a dividend yielding more than 3.5%, toward the high end of its average over the past decade. The real estate investment trust (REIT) focused on apartments has delivered 30 years of dividend stability and growth. While it hasn’t increased its payment every year, it has raised it for 14 years in a row, including by 5% late last year.
That combination of income and growth has contributed to the landlord’s strong total returns. It has delivered a more than 11.5% average annual total shareholder return in each of the last 10-, 15-, and 20-year periods, outperforming its apartment peers in each period.
