Spectra Energy (NYSE:SE) is upping its quarterly dividend by nearly 10%, offering income investors even more incentive to dig into this dividend stock. With a current yield of 3.5%, let's see whether this latest move is good for long-term investors.

The details
The pipeline and midstream specialist announced on Monday that it is increasing its next quarterly distribution to $0.335 per share, a 9.8% increase from the current number. At its current stock price, that equates to roughly a 3.8% annual yield.

The dividend "staircase"
Since its incorporation in 2006, Spectra Energy has had a history of increasing its dividend, and this latest push is no surprise. Even without the new add-on, Spectra has expanded its distribution 22% in the past five years. And it's not the only utility to continually create a "dividend stock staircase."

SO Dividend Chart

SO Dividend data by YCharts. 

Southern (NYSE:SO) has essentially mirrored Spectra Energy's increase with its own 21% improvement, while Duke Energy (NYSE:DUK) has managed a respectable 13% uptick.

Utilities have historically delivered steady dividends, as their regulated earnings and stable cash flow allow them to put extra funds straight back into investors' pockets. Southern's last distribution marked its 264th consecutive payout. But while Southern has been doling out dividends since 1948, Duke Energy's latest marks the 88th straight year of payouts -- nonstop dividends since 1926! 

Despite Spectra's relatively faster dividend increase, even its upgraded 3.8% yield still pales in comparison to Duke Energy's 4.6% and Southern's 5% distributions.

That is understandable, though, considering that Spectra Energy stock has soared 24% in the past year, leaving Duke, Southern, and the entire sector in the dust. 

Utilities have been shaken up by the Great Recession, volatile energy demand, and fluctuating fuel prices, and a dividend alone may not be enough to ensure long-term value anymore.

SE Chart

SE data by YCharts. 

Spectra's biggest price  jump came in June with the announcement of Spectra Energy Partners (NYSE:SEP), the company's newly formed master limited partnership.

Spectra Energy and Spectra Energy Partners are banking on natural gas, and Mr. Market has regarded their decision favorably. Spectra Energy Partners provides more stability, allowing the organizations to pay less tax and to pass on more profits directly to shareholders.

After missing on every 2012 quarterly earnings  and seeing shares slump 10%, Spectra had a much better time in 2013. The Spectra Energy Partners asset drop-down helped free up finances for larger distributions, and the utility has also made major headway on other fronts. It completed a major $1.2 billion New Jersey-New York natural gas pipeline expansion in November, paving the way for continued profit in an area starved for energy .

Recent approval for a new $3 billion joint venture pipeline with NextEra Energy (NYSE:NEE) in Florida should keep natural gas pumping to this high-demand region and revenue pumping to its owners. Regulators have already given a thumbs-up to the 474-mile pipeline, which is expected to be completed in May 2017. In the next 10 years, Spectra Energy expects to plow ahead with a whopping $25 billion in growth projects.

Southern and Duke stocks have slumped due in no small part to their large coal and nuclear generation fleets, which haven't kept up with natural gas' cheap energy offerings. As testament to Spectra's smart move, Duke Energy announced in December that is planning a $1 billion, 1,640 megawatt Florida natural gas plant will rely on Spectra's new pipeline for fuel. While rising natural gas prices could put coal and nuclear on the comeback trail, Spectra's transmission role will continue to keep it shielded from energy price fluctuations.