Better Dividend Stock: Enbridge vs. Energy Transfer
Enbridge (NYSE: ENB) and Energy Transfer (NYSE: ET) are competitors in the North American midstream sector. So, in many ways, they have similar businesses. But there are some very important differences, from the core business model to the success each has achieved over time. Before you simply buy the higher-yielding investment, which would be Energy Transfer, you should get into the details because lower-yielding Enbridge might just be the better dividend stock for your portfolio.As noted, both Enbridge and Energy Transfer operate in the midstream sector. This means that they own energy infrastructure assets, like pipelines, that help to move oil and natural gas around the world. The midstream tends to be the most reliable segment of the broader energy sector because it is a fee driven business. Energy Transfer and Enbridge collect the same fees for the use of their assets no matter what price oil and natural gas are fetching. So demand for energy is more important than commodity prices and demand for energy is normally robust even when oil prices are low.Image source: Getty Images.Continue reading
Enbridge (NYSE: ENB) and Energy Transfer (NYSE: ET) are competitors in the North American midstream sector. So, in many ways, they have similar businesses. But there are some very important differences, from the core business model to the success each has achieved over time. Before you simply buy the higher-yielding investment, which would be Energy Transfer, you should get into the details because lower-yielding Enbridge might just be the better dividend stock for your portfolio.
As noted, both Enbridge and Energy Transfer operate in the midstream sector. This means that they own energy infrastructure assets, like pipelines, that help to move oil and natural gas around the world. The midstream tends to be the most reliable segment of the broader energy sector because it is a fee driven business. Energy Transfer and Enbridge collect the same fees for the use of their assets no matter what price oil and natural gas are fetching. So demand for energy is more important than commodity prices and demand for energy is normally robust even when oil prices are low.
Image source: Getty Images.
