The midstream sector is known for providing investors with robust income streams, thanks to the large yields on offer from industry leaders like Kinder Morgan (KMI 0.58%) and Enterprise Products Partners (EPD 0.80%). But there's an interesting dichotomy between these two bellwether businesses, with Kinder Morgan sporting a 4% yield and Enterprise a much higher 6.9%.

If you are seeking out income, Enterprise is likely to be the better choice. A look at what could happen to the income you collect over the next 10 years will help to show why.

What do Kinder Morgan and Enterprise Products Partners do?

Both Kinder Morgan and Enterprise own energy infrastructure assets, like pipelines, storage, transportation, and processing facilities. Like most midstream businesses, they charge fees for the use of their assets as they help to move oil and natural gas around the world. This is very different from the upstream (energy production) and the downstream (chemicals and refining), where revenues and earnings are driven by highly volatile commodity prices.

Image source: Getty Images.

All in, Kinder Morgan and Enterprise have fairly reliable cash flows that back their lofty yields. For some perspective, the S&P 500 (SNPINDEX: ^GSPC) is only yielding around 1.3% today. The average energy company has a dividend yield of roughly 3.5%. If you are looking for income, Kinder Morgan and Enterprise are both worth a closer look.

But there's clearly a big difference between the two midstream giants when it comes to yield. Enterprise's yield is over 2.5 percentage points higher than what you'd collect from Kinder Morgan. Given Kinder Morgan's 4% yield, buying Enterprise would provide investors an over 50% increase in the income they would generate. Is it worth paying a premium for Kinder Morgan's dividend?

KMI data by YCharts

What does the past suggest about the future?

As the chart highlights, Kinder Morgan and Enterprise were trading in similar fashion until about a year ago. At that point, Kinder Morgan's shares took off and have handily outdistanced the units of Enterprise. This is where the huge yield discrepancy comes from. But here's the interesting thing: Kinder Morgan's last dividend increase, made in the first quarter, was a slim 2%.

The trend for Kinder Morgan has been just a single dividend increase per year, with the increase in 2024 amounting to 2%. And the increase in 2023 coming in at 2%. If that 2% trend continues, Kinder Morgan's dividend growth will be less than exciting.

Over the past three years, Enterprise has increased its distribution twice a year, once at the start and once at the midpoint. The first increase in 2025 came in at 2%. But if you compare that to the dividend paid in the first quarter of 2024, which would be the same comparison as Kinder Morgan's year-over-year increase, the hike was around 4%. Enterprise's distribution is, basically, growing twice as fast.

If you extrapolate the two different growth rates a decade out into the future, Kinder Morgan's dividend will grow from around $0.29 per share per quarter to roughly $0.36. Enterprise's distribution will increase from around $0.53 per unit per quarter to around $0.78. But the real magic comes when you look at the yield-on-purchase price if you bought both of these reliable income stocks today.

Right now, Kinder Morgan's yield is 4.1%. If you bought it and held it for a decade, your yield-on-purchase price would increase to... 5%. That's not a huge increase, and the modest 2% dividend growth rate is to blame.

Enterprise's yield today is around 6.9%. Given the higher distribution growth rate, buying and holding for a decade would lead to a yield-on-purchase price of around 10%. That's a much more attractive change.

Which growth rate would you rather invest in?

There are clearly a lot of additional factors to consider when comparing Kinder Morgan to Enterprise, but yield and income growth are two issues that are very important. And while a lot can change in a decade, current trends clearly suggest that investors have priced in a lot of good news for Kinder Morgan that has yet to provide any material improvement in its dividend growth. You can get a higher yield and a higher distribution growth rate from Enterprise, which, in 10 years, will leave you with a much more attractive income stream based on recent trends.

Unless you believe there's something particularly special about Kinder Morgan, you'll probably be better off with Enterprise Products Partners. That's particularly true if you are a dividend investor.