Five Dividend safety: This is the strongest coverage on the list. Second-quarter operational DCF covered the distribution 1.9x. Enterprise paid out $1.2 billion to unitholders and kept $1.1 billion. Trailing distributions equal about 76.6% of trailing earnings per unit of $2.88. The payment record shows a higher distribution every year since 2019, and recent increases have come twice a year: the latest quarterly payout of $0.56 compares with $0.545 a year earlier. Management also has a $5.0 billion buyback authorization and bought back $405 million of units over the trailing 12 months.
Bull case: Second-quarter adjusted EBITDA hit a record $2.83 billion, up 17% year over year, on record pipeline volumes of 14.7 MMBPD. Another $6.5 billion of organic projects is under construction, including an LPG export terminal expansion due by the end of 2026 and new Permian gas plants. At about 12x forward earnings, it is also the cheapest midstream name here.
Risk: Enterprise is a limited partnership, so holders receive K-1 tax forms instead of 1099s, which complicates taxes and IRA ownership. Total debt is $34.2 billion, and Wall Street is mixed: 12 analysts rate it a hold, compared with 10 buy or strong-buy ratings.
Kinder Morgan: Gas Pipeline Cash Flow Running Ahead of Budget
Kinder Morgan (NYSE:KMI) yields 3.52%. Its quarterly dividend is $0.2975, which annualizes to $1.19. Shares stood at $34.38 in early trading, up 28.66% year to date, and the stock outperformed its peers in Wednesday’s session
Dividend safety: Second-quarter free cash flow of $978 million covered the quarterly dividend bill of roughly $662 million about 1.5x. Trailing dividends equal about 72.8% of trailing EPS of $1.62. The balance sheet is strengthening. Moody’s upgraded Kinder Morgan to Baa1, and second-quarter leverage was improving toward 3.6x, below the 3.8x year-end budget. The dividend has gone up every year since 2018, when the quarterly payout rose from $0.125 to $0.20.
Bull case: In the second quarter, Kinder Morgan was tracking more than 5% ahead of its EBITDA budget and more than 12% ahead on adjusted EPS. The $9.6 billion project backlog is 92% natural gas, and more than 60% supports power generation and local distribution demand. That positions it to benefit as data centers and LNG exports pull more gas through its pipes.
Risk: Dividend growth is slow. The 2026 raise was 2%, and after this year’s rally, the stock trades at about 20x forward earnings (20). Investors are paying a fuller price for a small raise.
Williams Companies: Lowest Yield, Fastest-Growing Payout
Williams Companies (NYSE:WMB) has the lowest yield in this group at 2.91%. It earns its spot through payout growth. The 2026 annualized dividend was raised 5% to $2.10 per share, paid as a quarterly $0.525. Shares traded at $73, up 24.09% year to date.
Dividend safety: GAAP earnings make the payout look extended. Trailing dividends equal about 81.7% of EPS. Cash flow coverage is much stronger. Management’s 2026 AFFO guidance of $6.085 billion to $6.315 billion covers the roughly $2.57 billion annual dividend about 2.4x even at the low end. Williams cut its payout in 2016, when the quarterly amount fell to $0.20, and has raised it every year since 2017.
Bull case: Williams moves about one-third of the country’s natural gas, anchored by Transco. It raised 2026 adjusted EBITDA guidance to a $8.4 billion midpoint and lifted its long-term growth target. The CEO said Williams is “increasing our long-term EBITDA growth rate target to 11-plus percent compound annual growth through 2030.” Gulf Coast LNG demand is projected to rise by about 20 Bcf/d over the next 10 years, and the first phase of the Socrates power project is already delivering 200 megawatts. Analysts agree: 22 rate it buy or strong buy, with only 2 holds.
Risk: Leverage. The Momentum Midstream acquisition of up to $5.5 billion and growth capex of $7.3 billion to $7.9 billion push run-rate leverage to about 3.75x. The CFO said the balance sheet “leverage tightness is primarily an issue for ’26 and ’27.” At about 27x forward earnings, the stock leaves little room for stumbles.
PepsiCo: Decades of Raises at a Discounted Price
PepsiCo (NASDAQ:PEP) yields 4.35%. Its quarterly dividend is $1.48, or $5.92 annualized. The yield is high for PepsiCo because the stock is down 7.38% over the past year and has moved just 0.2% over five years.
Dividend safety: Trailing dividends equal about 73% of trailing EPS of $7.95. Net debt is 2.60 times EBITDA, and interest coverage is 10.26. Management plans $7.9 billion of dividends in 2026 out of $8.9 billion in total cash returns. The payment record shows higher annual dividends every year back to 1999, when the quarterly payout was $0.135.
Bull case: International sales are offsetting a soft U.S. snack business. Third-quarter organic revenue rose 3.1%, Latin America Foods grew 14%, and Asia Pacific Foods grew 10%. Adjusted EPS of $2.34 beat estimates for the 4th straight quarter. At about 15x forward earnings, investors get a cash-rich defensive company at a price well below its $166.41 52-week high.
Risk: Coverage from free cash flow is thin. PepsiCo’s FCF yield of 4.18% sits almost on top of its 4.16% dividend yield. Management also cut 2026 core EPS growth guidance to 2.5-3.5%, and core operating profit at the North America foods unit fell 12%. Future dividend increases are likely to be small until that business recovers.
United Parcel Service: Ultra-High-Yield Payout as the Turnaround Takes Hold
United Parcel Service (NYSE:UPS) is the only ultra-high-yield name here, at 6.73%. Its quarterly dividend is $1.64, annualized at $6.56, and shares trade at $99.41. The stock is up 20.39% over the past year but remains 38.24% below its level five years ago.
Dividend safety: This is the closest coverage on the list, and UPS sits last for that reason. Trailing dividends equal about 122% of GAAP EPS of $5.38, which was weighed down by transformation charges. Against 2026 adjusted EPS guidance of about $7.22, the payout is closer to 90.9%. Management expects free cash flow of about $5.5 billion this year against planned dividends of around $5.4 billion. The balance sheet provides some buffer, with $4.7 billion in cash and no commercial paper outstanding at quarter-end. The dividend has held at $1.64 for seven straight quarters. Its last increase was a penny, from $1.63, in early 2025.
Bull case: The Amazon volume glide-down is done, and pricing is improving: revenue per piece rose 11.3% to $15.96 in the second quarter. The CEO said, “Incremental volume today carries materially better economics than before because of the structural changes we’ve made.” UPS expects about $3 billion in transformation benefits in 2026 and trades at about 12x forward earnings.
Risk: There is almost no margin for error. Volume fell 3.6%, fuel costs rose 60.4%, and tariff uncertainty hangs over global shipping. If the cost savings slip, a $1.3 billion pension contribution and transformation costs could leave the dividend just covered by free cash flow, or not covered at all.
Five Payers, One Common Thread
Every company on this list pays its dividend from operating cash flow, and the coverage buffer shrinks as yield rises. Enterprise Products and Kinder Morgan have the widest margins. Williams offers the fastest payout growth, PepsiCo brings a record of annual increases going back to 1999, and UPS has the biggest yield for investors willing to follow its turnaround. Through year-end, the numbers to track are Williams’ leverage as the Momentum deal closes, PepsiCo’s North American snack margins, and whether UPS free cash flow keeps pace with its $5.4 billion dividend commitment.
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Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.
