If you are looking for an investment that will generate current income, midstream oil and gas pipeline players Enbridge Inc. (NYSE:ENB) and Enterprise Products Partners L.P. (NYSE:EPD) both handily beat what you'd get from the broader market. However, when you dig a little into the numbers, you'll see that one of these large pipeline investments has an edge. Here's why most dividend investors will probably prefer Enbridge over Enterprise.

Some similarities

Enbridge's dividend yield is 6.5%. Enterprise's distribution yield is roughly 6.8%. There's a bit of a difference there, but basically it's a tie, with both well above the market's yield of close to 2%.

Enbridge has increased its dividend for 22 consecutive years; Enterprise has increased its distribution for 21 years in a row. Again, that's essentially a tie.

Three men in hard hats looking over construction blueprints

Image source: Getty Images.

Enterprise has a market cap of roughly $55 billion, while Enbridge is a roughly $54 billion market-cap company: another tie.

Each company has a diversified set of largely fee-based assets spread across North America: one more tie.

With all that said, Enbridge's portfolio includes power facilities like solar and wind farms, providing diversification beyond the midstream sector. Enterprise is focused on the midstream space, though that includes everything from pipes to processing facilities to a fleet of ships. While neither lacks for diversification, if you want to stick to the midstream space, Enterprise has a slight edge here.

A deeper drop spells income opportunity

Stepping back, neither Enbridge nor Enterprise stands out as a better investment option just yet. The market, however, appears to have decided that that it likes Enterprise more: The partnership's units are down roughly 5% so far in 2018, compared to an 18% drop in the price of Enbridge.

A listing of Enbridge's 2017 projects, showing a total of $12 billion in investment

Enbridge was building in a big way in 2017. Image source: Enbridge, Inc. investor presentation.

The difference is partly explained by Enbridge's 2017 results. Although the company was building for the future last year, it partly funded its $12 billion worth of expansion projects by issuing new units. It also issued new units in 2016 to buy Spectra Energy, a large, growth-oriented acquisition. In total, the company's share count increased by 67% between 2016 and 2017. That's a huge number that helped push earnings per share and distributable cash flow per share down year over year, even though total earnings and distribution cash flow both rose. Lower is not the direction that investors like the per-share numbers to head.

Highlighting the issue was the company's decision to reduce its dividend growth projections over the next few years. Previously Enbridge had been calling for dividend growth of as much as 12% a year, but it is now projecting just 10% annually through 2020. Investors weren't pleased by that news either.

That said, 10% still handily beats the low- to mid-single-digit distribution growth that Enterprise is projecting. To be fair, Enterprise is shifting its business model to reduce the need to issue dilutive units to fund its growth. The slowdown, which might last a year or two, is intended to allow time for its current growth projects to come online and provide the cash flow cushion it needs to self-fund growth. That should make a conservatively run partnership even safer than it was before. And it's a very different model from what Enbridge has been doing, with that company's huge share increase in 2017. However, even in the best of years Enterprise's distribution growth was only in the 6% range.

ENB Dividend Per Share (Quarterly) Chart

ENB Dividend Per Share (Quarterly) data by YCharts.

The long-term impact of the faster dividend growth rate offered by Enbridge is pretty clear from the chart above. Over the past decade, its dividend grew by a massive 202%; Enterprise's distribution increased by a far more modest 69%. If you are an income investor, even with dividend-growth slowdown at Enbridge over the next few years, it's still likely to reward you with more income than you'd get from Enterprise's planned hikes. That's a clear win for Enbridge.

Err on the side of dividend growth

Enbridge and Enterprise are two very large and very similar midstream energy companies. There are differences, of course, but the key point of differentiation for income investors today is really disbursement growth. On that score, Enbridge's 10% dividend growth projection handily beats Enterprise's distribution growth prospects -- even before Enterprise is looking to shift more toward a self-funding model.

With the drop in Enbridge's share price leaving the yields on these two investments at similar levels, it looks like the market's short-term thinking is giving Enbridge the income edge right now.

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.