Now, these here midstream marvels don’t just dangle shiny baubles of dividends-they’re built like a riverboat with a solid keel and a cargo hold full of gold bricks. Predictable cash flows, balance sheets stouter than a Mississippi steamboat’s hull, and growth pipelines that’ll keep the dividends flowing like a spring-fed creek. Let’s take a jaunt down the river and meet three such specimens.
1. Energy Transfer: 7.5% yield
Energy Transfer (ET), that old riverboat captain of pipelines, has cleaned up its ledger and polished its paddlewheel. It’s now churning out a $5.3 billion pipeline to ferry 1.5 Bcf/d of natural gas from the Permian Basin to Arizona and New Mexico-a venture as ambitious as it is necessary, given the thirst of data centers and power plants.
And mark my words, the Lake Charles LNG project is the next big gamble. With MidOcean Energy as a partner and offtake contracts signed, it’s a voyage into the blue yonder of LNG exports. These waters may be uncharted, but the tides of global energy demand are turning, and ET’s got its oars in the water.
With $5 billion in growth capex this year and a distribution coverage ratio of 1.7, this old steamboat’s got the muscle to keep the dividends flowing. And with 90% of 2025 EBITDA tied to fee-based contracts, it’s as steady as a foghorn at midnight. The payout’s been raised 15 quarters straight-no trifling matter, that.
2. Enterprise Products Partners: 6.8% yield
Enterprise Products Partners (EPD) is the old salt of the midstream trade, having kept its dividend afloat through storms and droughts for 27 years. With 80% of its cash flow from fee-based contracts and take-or-pay provisions, it’s as reliable as the Mississippi’s current. Even when the LPG segment’s long-term contracts rolled off like a rusty hawser, EPD kept its bow above water.
Its balance sheet? A paragon of fiscal prudence, with leverage at 3x and debt locked in for 18 years at 4.7%. The man’s got the patience of a dockhand waiting for a barge. And with $4-4.5 billion in growth capex this year-up from a paltry $1.6 billion in 2021-it’s no idle talk about expansion.
ROIC of 13% and a recent acquisition of Occidental’s Midland Basin assets? That’s the work of a captain who knows where the treasure lies. At 6.8%, the yield’s a fair trade for a vessel built to last.
3. MPLX: 7.5% yield
MPLX (MPLX) is the rambler of the bunch, with a 7.5% yield and a distribution growth spurt of 10% a year for three years straight. Even with a 12.5% hike in 2024, the payout’s still covered 1.5x. Leverage at 3.1x? That’s the fiscal equivalent of a well-stocked pantry in a time of famine.
Its crude logistics business is tethered to Marathon Petroleum, a lifeline as sturdy as a riverboat’s anchor. Meanwhile, the natural gas and NGL segment’s doubling its growth capex to $1.7 billion-proof that the man’s got his eyes on the horizon. And with a $2.4 billion grab of Northwind Midstream, it’s a land grab in the oil patch, plain and simple.
At 7.5%, the yield’s a siren’s song. But with a 1.5x coverage ratio and a balance sheet as lean as a bargeman’s waist, it’s a voyage worth taking.
These three-ET, EPD, and MPLX-are the lifeblood of the energy trade, a trio of riverboats cutting through the fog of Wall Street’s greed. Take heed, ye who seek dividends, and steer clear of the sharks in the harbor. 🚢
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2025-08-27 04:23