Choosing Between ET Stock and Enterprise Products Partners: A 2026 Dividend Investor's Guide

When evaluating income-focused investments in the midstream energy sector, comparing the stock price of ET with Enterprise Products Partners (EPD) reveals an important investment decision. Both master limited partnerships operate similar business models, distributing reliable cash flows from energy infrastructure operations. Yet their dividend profiles tell very different stories about risk tolerance and investment stability.

Dividend Yields: Understanding the Return Premium Behind ET Stock

Energy Transfer currently offers a 7.1% distribution yield, while Enterprise Products provides 6.3%. On the surface, ET stock’s higher payout seems like an obvious choice for income seekers. However, this yield differential reflects something fundamental about market dynamics: higher returns typically compensate investors for accepting greater uncertainty.

Both companies focus on steady, low-to-mid-single-digit distribution growth rather than aggressive expansion. They operate in a deliberately “unsexy” business—moving oil and natural gas for customers, then passing along the cash. That’s the whole point. Yet Energy Transfer’s elevated yield exists precisely because the market has priced in additional risk factors that Enterprise has managed to avoid.

Why ET Stock Carries Higher Risk: Learning from History

Energy Transfer’s distribution history provides crucial context. During the 2020 coronavirus pandemic, the company cut its distribution in half—a dramatic reduction that devastated income-focused shareholders. Just four years earlier, during the 2016 energy sector downturn, Energy Transfer abandoned a planned acquisition in circumstances so contentious that dividend protection became questionable.

These weren’t isolated incidents. They reveal a company whose distribution remains vulnerable during energy sector stress periods. When oil prices collapse or natural gas demand weakens, ET stock’s yield advantage evaporates precisely when investors most desperately need reliable income.

Enterprise: Predictability Built Over Decades

Enterprise Products operates from an entirely different playbook. The company boasts a 27-year streak of consecutive annual distribution increases—essentially its entire history as a public MLP. Combined with an investment-grade balance sheet and a robust 1.7x distribution coverage ratio, Enterprise has positioned itself as the definition of “boring and reliable.”

This stability doesn’t come from accident. Conservative financial management, diversified customer contracts, and disciplined capital allocation have produced two decades of uninterrupted distribution growth. For energy sector income, this track record is remarkable.

The Real Question: Your Risk Tolerance Matters More Than Yield

Energy Transfer’s stock price of ET reflects the market’s assessment: higher immediate income, but with genuine uncertainty about distribution safety during downturns. Enterprise’s lower yield comes with a drastically different risk profile.

For most dividend investors—particularly retirees or those needing reliable quarterly payments to cover living expenses—Enterprise represents the superior choice. The psychological burden of worrying whether ET stock’s distribution will survive the next energy sector downturn often outweighs the extra 0.8% in annual yield.

However, investors with higher risk tolerance and longer time horizons might find ET stock’s elevated payout attractive, provided they maintain adequate portfolio diversification and can emotionally weather distribution cuts without panic-selling.

Final Thoughts: Don’t Chase Yield Without Understanding Context

The gap between ET stock’s 7.1% yield and Enterprise’s 6.3% isn’t an oversight—it’s the market pricing in real differences in distribution reliability. Before committing capital to either position, ensure your choice aligns with your personal circumstances, not just your desire for maximum income.