Investing $2,000 in High-Yield Midstream Stocks: Top Picks for Growth and Stability

Energy Transfer and Enterprise Products Partners are two high-yield midstream stocks to consider investing in with $2,000. Energy Transfer offers a 7.5% yield, strong financials, and growth opportunities, trading at a low valuation. Enterprise Products Partners has a long track record of distribution growth and operates in a stable, fee-based business. Both stocks are well-positioned for long-term growth.

Energy Transfer and Enterprise Products Partners are two high-yield midstream stocks that investors should consider for their $2,000 portfolio. Both companies offer attractive yields, strong financials, and growth opportunities, positioning them well for long-term growth.

Energy Transfer (NYSE: ET)

Energy Transfer offers a compelling combination of a high yield and solid growth potential. With a current yield of 7.5%, it provides a stable income stream. The company has significantly improved its financial profile over the past few years, with a balance sheet that management describes as the strongest it has ever been [1]. Energy Transfer's distribution has been increased for 14 consecutive quarters, and it is targeting a 3% to 5% annual growth rate moving forward [1]. Additionally, the company is set to spend $5 billion on growth projects this year, including natural gas supply for AI data centers and LNG exports, which are secular trends with significant growth potential [1]. Despite these strong fundamentals, the stock trades at a forward enterprise value-to-EBITDA multiple of just 8, making it a potential bargain for long-term investors [1].

Enterprise Products Partners (NYSE: EPD)

Enterprise Products Partners is a "sleep-well-at-night" stock, offering a long track record of distribution growth and a stable, fee-based business. The company has increased its distribution for 26 consecutive years and currently offers a yield of around 6.9% [1]. Enterprise's business is built on fee-based contracts, with many structured as take-or-pay, providing steady cash flows even in volatile energy markets [1]. The company operates in attractive markets, such as natural gas liquids (NGLs), and has a conservative balance sheet with leverage at just over 3x and a distribution coverage ratio of 1.7x [1]. For long-term investors seeking steady income growth, Enterprise Products Partners is an attractive option.

Conclusion

Both Energy Transfer and Enterprise Products Partners offer attractive yields, strong financials, and growth opportunities. Energy Transfer provides a high yield and growth potential, while Enterprise Products Partners offers a long track record of distribution growth and a stable, fee-based business. These stocks are well-positioned for long-term growth and can be considered for a $2,000 investment portfolio.

References:

[1] https://finance.yahoo.com/news/smartest-high-yield-midstream-stocks-070800317.html
[2] https://www.ainvest.com/news/mplx-high-yield-midstream-play-strong-distribution-earnings-momentum-2507/