4 Pipeline Stocks Ranked By Which One I'd Buy First

When considering midstream stocks for investment, Enbridge (ENB) stands out as the top choice. With an impressive 31-year streak of consecutive dividend increases, Enbridge boasts a high yield of around 5.9%, significantly outperforming the 1% yield of an S&P 500 fund. Moreover, Enbridge's diversification into regulated natural gas utilities and clean energy assets sets it apart from its competitors.

Following Enbridge, Enterprise Products Partners (EPD) is a strong contender. Operating as a master limited partnership (MLP), EPD has increased its distribution for 28 consecutive years, boasting a yield of 6%. However, MLPs come with tax complexities, such as dealing with K-1 forms and not being compatible with tax-advantaged retirement accounts.

Kinder Morgan (KMI) is another viable option, structured as a traditional corporation. This allows investors to easily hold it in an IRA. Although its yield is relatively lower at around 4%, Kinder Morgan has demonstrated consistency in dividend growth since its 2016 cut, which was aimed at reducing leverage and refocusing on growth.

Lastly, Energy Transfer (ET) boasts the highest yield at 7.2%, ideal for aggressive dividend investors. With a distribution growth of around 3% to 5% per year, Energy Transfer has successfully navigated past challenges, such as the aborted acquisition in 2016. However, the existence of convertibles may prove a deterrent for some investors. Ultimately, the choice depends on individual preferences and risk tolerance, as all four midstream giants offer attractive yields and unique characteristics.