The article compares Enterprise Products Partners (EPD) and Enbridge (ENB), two pipeline stocks with similar forward dividend yields of about 5.9% and 5.8% and roughly three decades of annual dividend increases. It finds EPD has stronger dividend coverage: distributions and buybacks equaled about 54% of cash flow from operations over the trailing 12 months through Q3, versus Enbridge's guided 60% to 70% of discretionary cash flow. EPD is also less leveraged, with debt-to-EBITDA around 2.9 compared with Enbridge's 4.5 to 5 target range. Although MLPs issue K-1s that complicate taxes, the article says EPD is still more tax-efficient, since Enbridge, as a Canadian corporation, is subject to withholding tax on dividends paid to U.S. investors. Enbridge stands out for its regulated natural gas utilities, which give it less cash flow volatility, and the article notes EPD's advantages could change over time.
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