Ignore Kinder Morgan -- Here Are 2 Better High Yield Options to Buy

Kinder Morgan Inc (NYSE: KMI) is a giant in the midstream oil and gas industry, and it just announced plans to increase its dividend from an annual rate of $0.50 a share to $1.25 by 2020. That's a huge hike, amounting to an average increase of 25% annually. If you are an income investor, you should stop and take notice.

But I don't think you should buy Kinder Morgan; instead, I'd suggest Enterprise Products Partners LP (NYSE: EPD) or Magellan Midstream Partners, L.P. (NYSE: MMP). Here's why.

The first reason I would avoid Kinder is the company's 2016 dividend cut. The giant midstream company makes heavy use of leverage compared to peers like Enterprise and Magellan. When oil prices started to tumble in mid-2014 it found it didn't have the financial flexibility to maintain its dividend and continue spending on its growth plans. The dividend was cut a painful 75%.

Source: Fool.com