Enterprise Products Partners (NYSE:EPD) and Brookfield Renewable Partners (NYSE:BEP) have both been excellent long-term investments. Enterprise Products, which is a midstream-focused master limited partnership (MLP), has increased its distribution to investors for 20 straight years, including in each of the last 59 consecutive quarters. Brookfield Renewable, on the other hand, is a publicly traded partnership focused on operating hydroelectric facilities. It has also been a steady dividend grower, having increased its payout every year since its formation in 2012. Those steadily growing income streams have helped both companies outperform the market throughout their history.

Those trends appear likely to continue in the coming years, making both energy companies worth buying. However, many investors likely only want to own one of these high-yielding entities. While they face a tough choice, one does stand out as a better buy right now.

A look at their financial profiles

The first thing investors should do when considering any investment is to take a close look at its underlying financials. Here's how these two energy stocks stack up:

Company

Dividend Yield

Credit Rating

% of Cash Flow Fee-Based or Regulated

Debt-to-Adjusted EBITDA

Dividend Payout Ratio

Brookfield Renewable Partners

6%

BBB+

87%

3.0x

Less than 90% of cash flow

Enterprise Products Partners

6.2%

Baa1/BBB+

86%

3.5x

63% of cash flow

Data source: Enterprise Products Partners and Brookfield Renewable Partners.

As that table shows, these two energy companies have very similar financial profiles. Each has a strong, investment-grade credit rating backed by conservative metrics. While Brookfield Renewable has a lower leverage ratio, it also has a higher dividend payout percentage. The company, however, is targeting to get its payout ratio down to about 70% over the long term.

While both offer similarly strong financial profiles, Enterprise Products' lower dividend payout ratio does give it a slight edge at the moment.

A person using a calulator with financial carts on the desk.

Image source: Getty Images.

A quick check on their valuations

The unit prices of both partnerships sold off along with the energy market at the end of 2018. Because of that, they entered 2019 with much lower valuations. However, after rebounding sharply over the past few months, they're no longer quite as cheap as they once were. Still, they both trade at reasonably attractive valuations.

In Enterprise's case, it generated $2.74 per unit of cash flow last year. With units recently trading at around $28.25 apiece, it implies that the midstream company sells for less than 10.5 times cash flow. That's an appealing price for such a financially strong company, especially since pipeline companies typically trade at a mid-teens multiple of cash flow. That low valuation is one reason why Enterprise Products Partners initiated a $2 billion unit repurchase program earlier this year.

Brookfield Renewable, on the other hand, generated $2.16 per unit of cash flow last year. With the company recently selling for about $32.50 per unit, it implies that Brookfield trades at 15 times cash flow. That's a fair price for such a good company.

A look at their growth potential

Enterprise Products' valuation is even more attractive when we factor in its visible near-term growth. The MLP's cash flow surged 18% in this year's first quarter thanks to the completion of nearly $3.5 billion of expansion projects since the start of 2018. That high-octane growth should continue for the next several quarters as Enterprise benefits from the continued ramp-up of those projects as well as the roughly $5 billion of expansions it currently has under construction.

Brookfield Renewable also expects to grow quickly over the next few years. The renewable energy company currently expects its cash flow per unit to expand at a 6% to 11% annual pace over the next five years, powered by its ability to increase the profitability of its existing portfolio as well as benefit from development projects it has under construction. Brookfield Renewable also has a knack for making high-return acquisitions. The company recently secured an investment of 750 million Canadian dollars ($558 million) in a hydroelectric portfolio in Canada that will provide it with some incremental cash flow. In addition, it made a small investment in some wind farms in India. In the meantime, Brookfield Renewable has more than $2.3 billion of available liquidity to continue making acquisitions.

Verdict: Enterprise Products Partners is the better buy

Both energy companies pay well-supported high-yielding dividends that they should be able to keep growing at a healthy pace over the next few years. Consequently, they should both continue generating market-beating total returns. However, Enterprise Products Partners stands out as the better buy right now since it not only has a slightly stronger financial profile but a much more attractive valuation. As a result, it could potentially outperform Brookfield Renewable from here in the coming years.