Diversified midstream oil and gas giant Kinder Morgan, Inc. (NYSE:KMI) is in the headlines today because the next few years are set to see explosive dividend growth. The hikes are so big (like the 60% increase planned for 2018) that it makes the roughly 5% annualized distribution growth at Enterprise Products Partners L.P. (NYSE:EPD) sound like chump change. But you shouldn't get so caught up in the numbers that you forget about the past here. And that's why I think Enterprise is still the better option.  

The big news

The headline-grabbing announcement from Kinder Morgan is that the company is planning on increasing its dividend 60% in 2018. It will follow that up with increases of 25% each in 2019 and 2020. That will take the annual dividend from $0.50 a share today to $1.25 per share in 2020. That's a massive increase and, honestly, is pretty noteworthy.    

The word "yield" spelled out on dice placed on rising stacks of coins

Image source: Getty Images.

Enterprise Products Partners, which is every bit as large and diversified as Kinder Morgan, should increase its distribution by about 5% in each of those years. I come to that conclusion because over the trailing year, the distribution has increased about 5%. Over the trailing three years, the annualized increase was roughly 5%. Over the trailing five years, the distribution was hiked around 5% each year. And across the last decade the average distribution increase was...about 5%. See a trend here?    

For income investors, Kinder Morgan's dividend news over the next couple of years is likely to be a lot more exciting than Enterprise's distribution news. But that misses some important facts.

Don't forget there was a dividend cut

For starters, Kinder Morgan's dividend hikes are an effort to restore the dividend to its former level. You see, in 2016, Kinder cut the dividend by 75%. Even after all three hikes, which will leave the quarterly dividend at around $0.32 per share, the dividend won't be back to the quarterly rate of $0.51 per share it was just prior to the cut.     

KMI Dividend Per Share (Quarterly) Chart

KMI Dividend Per Share (Quarterly) data by YCharts.

So the hikes are nice, but they aren't as grand as they may at first appear. But here's the real problem: Just a month or so before Kinder announced that it would be cutting the dividend, it was telling investors to expect more dividend increases. It even professed a commitment to "continue to return cash to our shareholders in increasing amounts."     

To be fair, the cut was likely the right move for the business. The energy industry was in a deep downturn and Kinder needed cash to keep investing in its growth projects and maintain an investment grade credit rating. But that doesn't diminish the impact on its shareholders, many of whom had come to rely on the dividend and management's commitment to continue to grow it over time. Kinder Morgan appears to be getting back on track today, but you shouldn't forget the history here.

Slow and steady wins the race

Which is why, out of this pair, Enterprise is my pick. The partnership lived through the same exact downturn in the energy industry but never skipped a beat with distribution growth. It was that same old and boring 5% all along. Distribution coverage, meanwhile, never fell below 1.2 times. And, just as important, Enterprise kept investing in its business, including making three opportunistic acquisitions, without the need to cut its distribution.  

Then there's the fact that Kinder Morgan's yield is just 2.65%. Enterprise's yield is a far more robust 6.7%. Kinder Morgan's yield won't come close to what you can get today from Enterprise until 2020 after all three dividend hikes (using today's stock price). But Enterprise is likely to have increased its distribution by around 5% in each of those three years, too. So, sure, Kinder's dividend news is exciting, but I'll stick with Enterprise. It's boring, but I like boring when it comes to distributions.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.