Better Buy: Kinder Morgan vs. Enterprise Products Partners

If you are looking for a high-yield dividend stock, then the midstream oil and natural gas sector is a good place to start. This niche of the energy industry has been out of favor on Wall Street despite the need for more infrastructure to move the United States' increasing production from where it gets drilled to where it eventually gets used. And if you have looked at the industry, then high-yielding Kinder Morgan (NYSE: KMI) and Enterprise Products Partners (NYSE: EPD) are names you have heard of. But which is the better option?

Both Enterprise Products Partners and Kinder Morgan are sizable midstream players. Enterprise's $63 billion market cap is about 30% larger than Kinder's $48 billion, which is a notable difference. However, they each rank among the largest energy stocks in North America and have a broad reach. Enterprise owns pipelines, processing facilities, storage, ports, and shipping assets. Kinder's list is virtually identical, with both companies getting paid largely for the use of their assets, not based on volatile energy prices. Basically, they stand toe to toe in the industry.

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