Looking only at yield stats can quickly lead you astray as an investor. But Enterprise Products Partners' (EPD 0.45%) 7.3% distribution yield will likely be a much better option for most investors when compared to Pioneer Natural Resources (PXD -2.28%) and its 6% yield. The important thing is that the yield isn't the reason why.

Enterprise: A steady performer with a simple story

There's nothing magical about Enterprise Products Partners. It's a very (very!) boring business.

The master limited partnership (MLP) owns midstream assets in the energy sector, like pipelines, storage, processing, and transportation infrastructure. These are large and expensive facilities that are vital to the global flow of energy. It would be difficult, if not impossible, to replicate or replace the assets that Enterprise owns in North America.

The key here is that Enterprise is a service provider to the energy industry. Lots of companies make use of its assets and pay fees to the company for that privilege. Energy demand is more important than the price of the commodities flowing through the system.

Energy demand tends to remain strong, even when energy prices are low. Thus, Enterprise creates fairly consistent cash flow over time from which it pays its lofty distribution. This isn't a growth story -- it's a yield story, with the yield likely making up the lion's share of returns over time.

For income-focused investors, that shouldn't be a big problem. The exciting part is that the distribution has been increased annually for 25 consecutive years. It also happens to be backed by an investment-grade rated balance sheet with distributable cash flow covering the distribution by a very healthy 1.7 times in 2023.

Enterprise is the kind of ultra-high-yield stock you can sleep well at night owning. That's why it's a better choice than Pioneer Energy.

Pioneer has too many moving parts

There are two big problems with Pioneer as a dividend stock. The first is the company's variable dividend policy.

While tying the dividend to the company's financial performance is a great way to ensure that investors get rewarded during periods of high energy prices, it inherently requires those same investors to feel the sting of falling energy prices via subsequent dividend cuts. But in the end, the dividend yield isn't a figure you can count on because the dividend will change.

Problem two is a bit more complex. Pioneer has agreed to be bought by ExxonMobil (XOM -2.78%). That means it may not be a public company much longer.

But the government has been taking an increasingly stringent look at mergers and acquisitions of late. Given Exxon's massive size, it seems likely that this deal will attract material scrutiny. If it falls through, there's a real chance that Pioneer's stock price would react negatively.

In other words, there are inherent risks involved with the dividend policy for income investors. And there's an added risk when you consider the company's proposed acquisition by Exxon. If you're trying to create an income portfolio that generates cash that you can use for living expenses, the story here is too complex to bother with.

Now's a decent time to buy Enterprise

While Enterprise's distribution yield has been higher in the past, it's currently toward the high side of its historical yield range. That suggests that the MLP is attractively valued today and might be worth adding to your portfolio.

Whatever you decide with Enterprise, make sure you tread carefully with Pioneer. The high yield isn't as attractive as it may seem, and any problems with the Exxon deal could lead to a bad outcome for Pioneer shareholders.