Enbridge (ENB) stock is trading at a yield of ~5.9%, which is ~120 basis points higher than TC Energy’s (TRP) yield. The two stocks have seen a significant rise in their yields in the last five years. In five years, TC Energy has risen 6%—better than Enbridge’s ~20% fall. At the same time, the two companies’ dividends continue to rise. The dividend growth isn’t reflected in the stock prices, which pushes the yields higher.
The above graph compares TC Energy and Enbridge’s forward dividend yields over five years. As the graph shows, Enbridge’s yield, which was below TC Energy’s yield earlier, has remained higher than TC Energy’s yield for two and a half years. Enbridge stock’s underperformance contributed to the relative rise in its yield.
Enbridge has been paying dividends to its shareholders for over 64 years. Enbridge’s dividend grew at an average compound annual growth rate of 12.1% over the last 20 years. Enbridge expects 10% compound annual growth in its dividends through 2020.
TC Energy expects annual dividend growth of 8%–10% through 2021. TC Energy has raised its dividends for 19 consecutive years.
Both of the stocks have a strong track record of stable dividend growth. The yields are attractive.