Magellan Midstream Partners, L.P. (NYSE:MMP) is a very well run midstream partnership. But if you are looking to maximize your income today, you might want to consider Enterprise Products Partners L.P. (NYSE:EPD) and Holly Energy Partners, L.P. (NYSE:HEP). Both serve the oil and natural gas industry, are continuing to grow their distributions, and, perhaps most important, offer higher yields than Magellan.

Nothing wrong, but...

Magellan offers investors a robust 5.5% distribution yield today. It has increased its distribution for 17 consecutive years, and the average annualized distribution increase over the past decade was an impressive 11%. These are all great stats if you are an income investor.

A man looking out over an oil processing plant

Image source: Getty Images

Equally impressive, the partnership appears to be gearing up for more growth. It currently has around $1 billion in projects under construction today, with plans for more. In the end, there's a lot to like here. But if you are looking for income today, there are partnerships with similarly impressive distribution stats and growing businesses that offer higher yields.

The big one

The first place you should look for a higher yield is diversified midstream industry giant Enterprise Products Partners. It offers a 6.7% distribution yield, more than a full percentage point higher than Magellan. And the distribution has been increased for 20 consecutive years. Where it falls short of Magellan is in distribution growth, which has averaged around 6% annualized over the past 10 years. That's a notable difference, but if you are looking for a mix of distribution growth and high-income today, well, Enterprise wins.

The partnership currently has around $9 billion of growth investments in the works today as well. So it's reasonable to expect the company's long string of distribution increases to continue. The scale of Enterprise's investments, however, brings up another factor to consider: size.

Enterprise, with a $53 billion market cap, is much larger than Magellan, which stands at around $14.5 billion. Connected to that is Enterprise's widely diversified business, which spans across pipelines, storage, processing, and even a fleet of ships. It not only has its fingers in more pies than Magellan, where two businesses account for around 90% of gross margin, but it can take on projects that would be too large for its lower yielding peer.

A pie chart showing Enterprise Products Partners diversification and a bar chart showing an increasingly fee based business

Enterprise is a broadly diversified partnership. Image source: Enterprise Products Partners L.P.

If you are looking to generate as much current income as possible by owning great companies, Enterprise should rank higher than Magellan on your short list.

A little more risk, a lot more yield

Another name to consider is Holly Energy Partners, which currently offers a huge 8.3% yield -- nearly three percentage points more than Magellan. Holly has increased its distribution every year since it went public in 2004, bringing its streak to 13 consecutive years. The average annualized distribution increase over the last decade was roughly 6%, on par with Enterprise.

Holly's roughly $2 billion market cap, however, means it's notably smaller than both Enterprise and Magellan. It's also been adding leverage at a fast clip, with debt to EBITDA spiking over the past year or so. That's part of what has led investors to push the units lower and, thus the yield higher. That said, Holly's debt to EBITDA figure is still below that of Enterprise, and management has expressed a willingness to add debt in the near term to support acquisitions that will foster long-term growth.

HEP Financial Debt to EBITDA (TTM) Chart

HEP Financial Debt to EBITDA (TTM) data by YCharts

On the growth front, Holly recently announced deals worth a combined $250 million to buy the remaining portions of pipelines in which it already had ownership stakes. And while a fast rise in the company's debt levels is worrying, its revenues are 100% fee based with roughly 80% locked in by long-term contracts. That means it should be able to handle the elevated debt level while it starts to work down leverage over time, using the cash flow generated by the new assets.

Magellan is a more conservatively run partnership, but if you are looking for a high level of income you might want to take a moment to examine Holly's business. The high yield might be worth the extra risk.

Income options

Magellan is a great partnership that would be a good option for most investors. Its distribution growth should be especially enticing to those focused on income growth. What it doesn't offer is the highest yield in the midstream space. Investors seeking to maximize current income today should look at equally well run Enterprise and its higher yield. And for those willing to take on a little more risk, Holly Energy's materially higher distribution yield might be a good fit despite its swiftly increasing debt load.

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.