Plains All American: A High-Yielding Energy Infrastructure Company with a 9% Yield

Plains All American is an energy infrastructure company that offers a high yield of 9% at current prices, exceeding the average of the already high-yielding energy midstream industry. The company's strong yield makes it an attractive investment opportunity for income-seeking investors.

Plains All American (NASDAQ: PAA) is an energy infrastructure company that offers a high yield of 9% at current prices, exceeding the average of the already high-yielding energy midstream industry. This strong yield makes it an attractive investment opportunity for income-seeking investors.

The company's resilience is bolstered by its fee-based contracts and minimal commodity price exposure. Plains All American benefits from growing energy demand, particularly driven by the expansion of Artificial Intelligence (AI) data centers. While energy commodity prices are not a significant factor for the company, the increasing demand for energy, including electricity generated by burning oil, presents a tailwind for its business.

Plains All American's recent acquisition of a 55% stake in the EPIC pipeline, which transports crude oil from areas such as the Eagle Ford formation to Corpus Christi, is a strategic move. This deal, announced in September 2025, should have a meaningful impact on the company's results and is financed via the proceeds of its natural gas liquids business sale, which is expected to net around $3 billion in early 2026.

The company's management has a clear return threshold for acquisitions, ensuring that only highly accretive deals are pursued. In the most recent quarter, Plains All American's crude oil business experienced EBITDA growth of around 4%, demonstrating solid performance.

Plains All American offers a very high dividend yield of 9.6%, which is highly attractive in absolute terms. The company is trading at around 9x to 10x this year's expected net profits, making it an attractively valued investment. When considering enterprise value to EBITDA, Plains All American has one of the lowest valuations among its peers, underlining its attractiveness.

In conclusion, Plains All American's strong yield, resilient business model, and strategic acquisitions make it an attractive investment opportunity for income-seeking investors. The company is well-positioned to benefit from growing energy demand and declining interest rates, presenting a compelling case for investors.