The comparison becomes much easier when comparing a company such as Con Edison (NYSE:ED) and an MLP such as ONEOK Partners (NYSE:OKS). Con Edison has a five year dividend growth rate below 1% (0.90% to be exact), and it yields close to 4.30%. ONEOK Partners on the other hand yields over 4.70% and has a much high distribution growth rate of 5.40% per year.
In addition, the growth prospects behind the partnership are much brighter than those for the New York State based utility, despite the much shorter streak of consecutive distribution increases for the MLP (38 years for ConEd versus 7 years for ONEOK Partners).
Overall, as part of my screening criteria going forward, I would use the sum of ten year annual dividend growth and current yield when comparing two or more separate investments. However, in my individual analyses of companies’ fundamentals, valuation and growth prospects, I would continue scrutinizing every aspect in order to come up with an investing decision. Unfortunately, one can only automate their investing to a certain extent, but then investors still need to evaluate qualitative characteristics based on their own investment experiences. Investing is part art and part science, which is why investing needs to be a mixture of hard data coupled with common sense and a dose of luck.
Full Disclosure: Long MCD, YUM, OKS, ED,KMB