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There are many ways to start generating some passive income. Investing in dividend stocks is one tried-and-true method. Many companies have a long history of paying attractive dividends.

However, some sectors are better than others for producing passive income. Pipeline stocks  are some of the best because they offer  high dividend yields  and steady growth. Here are three high-quality pipeline stocks that are big-time income producers.

Enterprise Products Partners  (EPD -1.21% ) has been a reliable  passive income producer. The master limited partnership (MLP) has a vast pipeline network that generates steady cash flow backed by long-term, fixed-fee contracts to support its high-yielding dividend that currently clocks in at 6.8%, well above the S&P 500's 1.5% dividend yield.

Meanwhile, it has increased its distribution to investors for 23 straight years -- including 3.3% over the past year -- by steadily expanding its pipeline network.

The MLP should have plenty of fuel to continue growing its payout. It currently has $4.6 billion of contractually secured capital projects under construction, which should supply a steadily increasing cash flow stream as Enterprise completes construction in the coming years. It has several more projects in development, including a major offshore oil export terminal and a carbon dioxide transportation and sequestration project. The company also has a knack for making acquisitions. It recently spent $3.25 billion to buy Navitas Midstream Partners, immediately boosting its cash flow while supplying it with new growth prospects.

Enterprise has plenty of fuel to fund its growth, given its strong financial profile. It produces ample cash to cover its high-yielding distribution and has a top-tier credit rating. Because of that, Enterprise should have no problem continuing to grow its payout.

Enbridge  (ENB -0.11% ) also has an excellent dividend track record. The Canadian pipeline giant has increased its payout for 27 straight years, growing its payment at a 10% compound annual rate during that time frame. It currently offers an enticing 5.7% dividend yield. 

Enbridge can also grow the payout. The company has a multibillion-dollar expansion backlog of contractually secured projects, including new gas pipelines and renewable energy projects. These investments should help Enbridge grow its cash flow per share by 5% to 7% per year through 2024. That growing cash flow should provide Enbridge with ample fuel to keep increasing its dividend.

It has ample financial flexibility to fund that growth thanks to its conservative dividend payout ratio and rock-solid balance sheet. Billions of dollars of annual investment capacity allow it to finance expansion projects, repurchase shares, and make acquisitions. Enbridge is also increasingly focused on investing in infrastructure supporting cleaner fuels, which should supply lots of growth opportunities.

ONEOK  (OKE -0.54% ) has delivered more than 25 years of stable or rising dividend payments. Overall, the pipeline company has grown its dividend at a 13% compound annual rate since 2000. Its reliable dividend currently yields 5.6%.

ONEOK has completed $5 billion in projects in recent years, giving it significant earnings capacity as volumes rise in the future. That rising cash flow will provide ONEOK with the funds to reduce debt and reinvest into high-return expansion projects.

With its largest infrastructure projects complete, ONEOK's focus is now on maximizing cash flow. That includes taking advantage of opportunities to complete small bolt-on expansion projects with quick in-service dates, attractive returns, and low capital requirements. These investments should supply incremental cash flow to continue growing its dividend. 

Pipeline companies tend to generate very stable cash flow backed by long-term contracts. That allows them to pay attractive dividends and invest in expansion projects. Because of that, pipeline stocks like Enterprise Products Partners, Enbridge, and ONEOK can be great ways for investors to generate a gusher of passive income.

Matthew DiLallo has positions in Enbridge and Enterprise Products Partners. The Motley Fool has positions in and recommends Enbridge. The Motley Fool recommends Enterprise Products Partners and ONEOK. The Motley Fool has a disclosure policy.

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