Energy Transfer (ET) Vs. Enterprise Products Partners (EPD): Which Dividend Is Best?

What’s coming down the pipeline for income-focused investors in 2025? If you like to see cash dividends show up in your account, you’ll definitely want to take a look at Energy Transfer (NYSE:ET) and Enterprise Products Partners (NYSE:EPD). They’re both well-known energy firms — but for yield harvesters, one stock has an edge over the other. 

So, does Energy Transfer or Enterprise Products Partners deserve to be called a dividend champion? It may be hard to pick one over the other because, at first glance, they’re similar companies. We’ll do some deep drilling now, though, and tap into the dividend profiles to pick a winner between ET stock and EPD stock.

A Pair of Solid Energy Picks

There’s no denying that Energy Transfer and Enterprise Products Partners have a lot in common. Both companies specialize in what’s known as “midstream” energy services for oil and natural gas.

That’s a fancy way of saying that Energy Transfer and Enterprise Products Partners store and transfer oil and natural gas through extensive pipeline networks. You might not spend much time thinking about these two companies, but for many Americans, their modern way of life wouldn’t be possible without Energy Transfer and Enterprise Products Partners.

Both of these energy firms like to reward their loyal shareholders with hefty dividend distributions — but we’ll get into the specifics in a moment. First and foremost, income investors should want to know whether ET stock and EPD stock represent fundamentally solid businesses.

As it turns out, the answer is yes for both companies. Starting with the top-line results, Energy Transfer’s revenue grew from $78.586 billion in 2023 to $82,671 billion in 2024. So far, so good.

Now turning to the bottom line, Energy Transfer improved its net income from $5.294 billion in 2023 to $6.565 billion in 2024. Clearly, this company is a massive moneymaker and Energy Transfer appears to be on the right track, financially speaking.

Meanwhile, Enterprise Products Partners offers a similar growth trajectory. The company increased its revenue from $49.715 billion in 2023 to $56.219 billion in 2024. Furthermore, during the same time frame, Enterprise Products Partners expanded its net income from $5.657 billion to $5.97 billion.

Focus on Performance and Value

From a financial point of view, Energy Transfer and Enterprise Products Partners are similarly solid energy businesses. Both of them should be able to pay out dividends in 2025 without any need to cut those dividends.

Moving on to performance and value, we can see that Energy Transfer’s shareholders fared well in recent years:

Impressively, ET stock has gained approximately 144% over the past five years, and this doesn’t include the dividend payments. Hence, you might conclude that Energy Transfer must be overvalued, right?

Actually, if we apply a tried-and-true valuation metric, it appears that Energy Transfer stock remains reasonably priced. Despite the stock’s multi-year rally, Energy Transfer’s trailing 12-month (TTM) price-to-earnings (P/E) ratio is quite reasonable at 13.74x.

Does Enterprise Products Partners also check the boxes for performance and value? First, let’s glance at the stock’s five-year chart:

Not counting the dividend distributions, EPD stock returned around 86% to the company’s shareholders during the past five years. That’s certainly respectable, though it doesn’t match up to ET stock’s performance.

In terms of value, Enterprise Products Partners isn’t extremely different from Energy Transfer. To be specific, Enterprise Products Partners has a TTM P/E ratio of 11.64x. I suppose that’s slightly “better” than Energy Transfer’s P/E ratio, but in the final analysis, ET stock’s long-term investors have grown their wealth at a faster pace.

Which One Is the Dividend Champion?

We’ve discovered that Energy Transfer and Enterprise Products Partners are both rock-solid revenue growers with low valuations. Energy Transfer stock has been the better performer, but which pipeline powerhouse is the real dividend champion here?

To be sure, both of these businesses are generous dividend yielders. No matter how you slice it, Enterprise Products Partners’ forward annual dividend yield of 6.84% is enticing for income seekers.

Yet, even this ultra-high yield doesn’t beat what Energy Transfer has to offer. Believe it or not, Energy Transfer features a jaw-dropping 7.45% forward annual dividend yield.

This isn’t what I call “dividend bribery,” which is when a company with poor financials tries to lure investors with a high but unsustainable dividend yield. As we’ve seen, Energy Transfer’s is fundamentally sound and has no obvious reason to slash its dividend in 2025.

Don’t get the wrong idea. It’s fine to own Enterprise Products Partners stock as this is also a solid pipeline business for dividend investors. However, a head-to-head comparison indicates that, among these two oil-and-gas infrastructure contenders, the better choice for yield hunters is Energy Transfer stock.

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