Midstream pipeline owners are out of favor today and offering investors big yields, despite the still strong demand for the services they provide. Two high-yield names that might come up on your list here are The Williams Companies (WMB 0.77%) and Enbridge (ENB -0.61%). Which one is the better dividend stock? It's subtle, but there is a winner in this contest.

1. The dividend comparison

Since the investment question here is centered on the dividend, it makes sense to address the issue right up front. Williams' dividend yield is roughly 6.5%. Enbridge's yield is 6.6%. That's basically a toss-up for most investors, although Enbridge has a slight edge.

The word yield spelled out with dice sitting atop stacks of coins.

Image source: Getty Images.

The more interesting comparison is to be found in comparing dividend histories, though. Enbridge has increased its dividend each and every year for 26 years, putting it in the rarified Dividend Aristocrat space. Williams, by comparison, cut its dividend by nearly 70% in 2016. It has increased the payment each year since that cut, but the dividend still isn't back to its previous level. To be fair, that was a difficult time for the midstream sector, including limited access to capital markets, so the cut was probably a good move for the company. Williams was also tied up in an ugly acquisition situation at the time that ultimately went nowhere. So, there was a lot going on, and some of the pain was probably self-inflicted.

That was a long time ago, however, and Williams' dividend coverage ratio was a solid 1.8 times in the second quarter. Therefore, it's unlikely the dividend will get cut again anytime soon. Still, more conservative types who value reliability will clearly prefer Enbridge.

2. The core business

That said, the businesses here are notably different. Williams is basically a natural gas pipeline operator, which, by its measure, handles 30% of the natural gas in North America. That puts it in an interesting position since natural gas is expected to be a key source of energy as the world looks to shift away from dirtier options for power and industrial inputs, most notably coal. And, given its toll-taker business model, it gets paid for the use of its expansive network, so an investment here removes a lot of the vagaries of commodity price volatility. Basically, it's a pretty consistent business tied to a sector of the energy space that's likely to see solid demand even as the world shifts toward cleaner energy options.

Enbridge is far more diverse, owning a collection of oil pipelines (54% of EBITDA), natural gas pipelines (29%), a natural gas distribution business (14%), and renewable power projects (3%). For investors who appreciate the benefits of diversification, Enbridge will probably be a better fit.

Since nearly half of its business is tied to natural gas and clean energy, you aren't giving up too much on the clean energy transition here compared to Williams. Notably, Enbridge claims to hold the No. 2 spot with regard to miles of natural gas pipeline and the No. 1 spot by volume in its natural gas distribution business. It's worth noting that Williams has clean energy plans, but they aren't large enough to show up in its numbers just yet. Enbridge, on the other hand, has a collection of offshore wind projects in Europe that should increase renewable power beyond 3% of EBITDA in the coming years.

The fly in the ointment for some will be Enbridge's oil pipeline operations, which are still very important. The thing is, even as much as the world might like oil to go away, that's not likely to happen for decades. So, this is something of a cash cow business that can help to fund Enbridge's cleaner efforts. If you're looking for a natural gas investment, Williams is the winner. However, if you want a diversified energy play, Enbridge comes out on top.

WMB Dividend Per Share (Quarterly) Chart

WMB Dividend Per Share (Quarterly) data by YCharts.

3. Growing the business and the dividend

Williams believes it can grow adjusted EBITDA at around 5% per year over the foreseeable future. That isn't a bad number and will likely come from a mix of internal development and acquisitions. The dividend should trail along with adjusted EBITDA growth. Enbridge is targeting distributable cash flow growth of between 5% and 7%, with the dividend likely to rise at a similar pace. Internal investment and acquisitions are, again, the core of the story.

Adjusted EBITDA and distributable cash flow are obviously different metrics. However, the dividend growth figures provide a common ground here, and Enbridge comes out on top. And, while the difference in dividend growth might seem slight at just a percentage point or two, that adds up over time. For investors interested in a mix of yield and dividend growth, Enbridge will have the edge.

Not an easy call, but one name wins

When you sum up these three points, Enbridge looks like the better option for most dividend investors. It would be overkill to suggest that it's a slam-dunk winner, but all in, it comes out on top for dividend history, diversification, and growth. If you are focused on natural gas, you might prefer Williams, of course, but beyond that, Enbridge appears to be the better long-term call here.