Better Stock for Passive Income: Enbridge with Its 70+ Years of Payouts or Energy Transfer with Its 6.6% Yield?

With reliable cash flows and long-term deals locked in, energy companies can offer shareholders a steady stream of passive income through dividend payouts. Two examples of that are Enbridge (NYSE: ENB) and Energy Transfer (NYSE: ET).

Each company offers a dividend that yields 5% or higher, but between the two, one stands out as the better option for passive income.

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Consistent dividend payouts

Enbridge uses an all-of-the-above energy strategy through four core businesses:

• Liquids pipelines
• Natural gas pipelines
• Gas utilities and storage
• Renewable energy

Its gas and oil operations are massive, as Enbridge transports roughly 20% of the natural gas consumed in the U.S.and around 30% of the crude oil produced in North America.

With its assets, Enbridge is eyeing over 50 potential data center opportunities that would require natural gas and is expected to give the go-ahead on some projects in 2026 and 2027.

For renewable energy, Meta Platforms is one of the company's big-name customers. In 2025, Meta signed a contract to use all the solar energy produced at a facility under construction in Texas. Then, in May, Enbridge announced it was developing a battery energy storage and solar project to support Meta's data center operations in Wyoming.

In terms of passive income, Enbridge is a reliable dividend payer, with more than 70 years of payouts. It hasn't qualified as a Dividend King by increasing its dividend payout for 50 consecutive years, but it is on its way to becoming one, with 31 consecutive years of dividend increases. As of this writing, the dividend payout yields 5%.

A shorter track record but a bigger yield

Natural gas is the third-largest source of electricity for data centers worldwide, according to the International Energy Agency. With over 140,000 miles of pipeline and related infrastructure in 44 states, Energy Transfer is in the driver's seat for capitalizing on that demand.

It's already doing so, with an agreement to supply natural gas to three of Oracle's data centers. Both companies, however, are facing a recent setback: New Mexico regulators have rejected Energy Transfer's proposed pipeline across the state, which could delay Oracle's Project Jupiter data center from launching. According to a Bloomberg report, Oracle said the project remains on schedule.

It also has an indirect relationship with Meta, as it will supply gas to Entergy Louisiana, a subsidiary of Entergy, which will supply power for a data center project Meta has in the area. In addition, Enbridge announced in its 2026 first-quarter earnings report that it will provide natural gas transportation services to Nexus Data Centers for its artificial intelligence hyperscale campus.

For passive income, Energy Transfer doesn't have the same history as Enbridge, with decades of dividend payouts or consecutive dividend increases. But its dividend payout currently yields a hefty 6.6%, well above Enbridge's 5%.

Picking the dividend stock winner

Both companies could be portfolio considerations, but for passive income, I would pick Enbridge over Energy Transfer. While Energy Transfer's dividend payout offers a higher yield, Enbridge has history on its side as not only a reliable dividend payer for more than 70 years but also a reliable dividend increaser. That's exactly what you want with a passive income investment.

Jack Delaney has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Enbridge, Entergy, Meta Platforms, and Oracle. The Motley Fool has a disclosure policy.