Big dividends can be intoxicating, but you need to understand what's backing the quarterly payments. You may end up surprised by a dividend reduction if you don't.

That's why long-term income investors will find Enbridge (ENB -0.71%) and Hannon Armstrong Sustainable Infrastructure (HASI -0.51%) attractive, but will want to tread cautiously with ConocoPhillips (COP -1.35%). Here's what you need to know about each.

Enbridge: This old dog can learn new tricks

Canadian midstream company Enbridge has increased its dividend annually for 27 consecutive years. Its yield at the current share price is around 6.4%. Its portfolio of vital energy infrastructure assets, which help move oil and natural gas around the world, spans North America.

It would be virtually impossible to replace or replicate Enbridge's collection of pipelines, storage, and transportation assets. Moreover, the vast majority of its revenue comes from fees or long-term contracts.

It is a solid company that's currently generating around 2 billion Canadian dollars ($1.49 billion) more in cash flow annually than it needs to run its business and pay its dividend. This suggests the dividend is safe. Meanwhile, it is working on CA$10 billion worth of growth projects as it looks to expand its operations.

And that's where things start to get more interesting as environmental, social, and governance (ESG) investors look to the future. Enbridge has CA$2.8 billion in clean energy investments that will start coming online this year, including a large offshore wind farm in Europe. And it recently acquired Tri Global Energy, a company that develops renewable power projects, to help speed up its pace of clean energy development. 

Today, clean energy only accounts for around 4% of Enbridge's earnings before interest, taxes, depreciation, and amortization (EBITDA), but this company is clearly using its "old energy" assets to power its expansion into the clean energy future.

Hannon Armstrong: A different kind of energy company

Hannon Armstrong is a real estate investment trust (REIT) that pays a dividend yielding around 4.8% at the current share price. What it owns are mortgages on clean energy assets and the long-term power contracts that back them. This gives a clear line of sight to the dividend, noting that the distributable earnings per share payout ratio in the third quarter was a fairly healthy 76.5%. (REITs must pay out a minimum of 90% of their taxable earnings in dividends every year to avoid corporate-level taxation.)

This is a unique play on the clean energy space, but its future looks pretty solid. For starters, Hannon Armstrong provides capital to an industry that's expected to continue growing for years. Second, management believes that it will be able to grow its distributable earnings by as much as 13% a year, on average, through 2024. So the business looks like it is still on a solid growth track, which will translate to dividend growth of as much as 8% a year.

If you are used to looking at oil companies in the energy space, you might need to do a little more homework to get comfortable with Hannon Armstrong. But the extra effort of getting to know this REIT could be worth it if you are looking to add some clean energy to your dividend portfolio. 

ConocoPhillips: Up and down is a rough ride

There is nothing inherently wrong with ConocoPhillips. In fact, it is a well-run oil and natural gas producer. But for anyone looking to add a reliable dividend payer to their collection of income stocks, it could be a disaster. That problem is that it has a variable dividend policy that ties its payouts to shareholders to the prices of the commodities it produces.

ConocoPhillips pays a regular dividend and might, if the business is doing well, add a supplemental payment. In the second quarter, its basic dividend was $0.46 per share and its variable one was a huge $1.40 per share.

That sounds great, but it was possible because of high oil prices, which have since pulled back somewhat. The third quarter's basic dividend was $0.51 per share, a generous increase, but the variable dividend was trimmed to $0.70, a huge cut. 

Given that swift and dramatic price swings are common for fossil fuels, this type of dividend variability should be viewed as normal. And because of that, long-term dividend investors looking to live off the income they generate from their portfolios should tread with extreme caution here. The yield you see when you buy this stock probably won't last, and you certainly shouldn't annualize the variable payment when assessing the dividend yield.

A changing future

ConocoPhillips' variable dividend is headed for the type of change that income investors don't like: payout cuts. That's by design and shouldn't be seen as a slam against the company, which is doing exactly what it said it would. But if you, as an income investor, weren't aware of the company's model, you might get shocked when those payout cuts occur. And you certainly can't count on those big dividend checks continuing for the long term.

Enbridge, meanwhile, has an impressive dividend history, a big yield, and investment plans that suggest it will keep growing its payouts even as clean energy sources displace fossil fuels. REIT Hannon Armstrong, meanwhile, is set to benefit directly from clean energy growth as that industry seeks out the capital it needs to keep building. Investors will benefit along the way, too, as its dividends expand.