In October of 2023, American Electric Power (NASDAQ: AEP), also known as AEP, increased its quarterly dividend by $0.05 a share, taking it from $0.83 to $0.88. That's a roughly 6% hike. What's important about that dividend move is that it lives up to a key management promise to dividend investors.

Here's what you need to know.

Although a 4.1% dividend yield may not stack up against a virtual no-risk certificate of deposit (CD) offering as much as 5%, that doesn't mean investors should pass on AEP. The big benefit of a reliable dividend stock over a CD is that the interest a CD pays won't grow over time while a company like AEP can, in fact, increase its dividend -- just like AEP announced in October.

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Source Fool.com