Top 5 High-Yield Midstream Stocks for Long-Term Growth and Dependable Cash Flow

Five high-yield midstream stocks to buy now and hold for the long term are Energy Transfer, Enterprise Products Partners, Western Midstream, Plains All American Pipeline, and Sunoco Logistics Partners. They offer dependable cash flow, fund generous distribution payouts, and are set to benefit from surging demand for natural gas tied to artificial intelligence, data centers, and liquid natural gas exports. Energy Transfer has a 7.4% yield, Enterprise Products Partners has a 6.8% yield, and Western Midstream has a 9.4% yield. These stocks have solid upside potential and are positioned to benefit from growth in the Permian Basin, data center boom, and LNG exports.

Investors seeking reliable income streams in the energy sector should consider midstream stocks. These companies own energy infrastructure, such as pipelines and storage facilities, and generate consistent cash flows regardless of commodity prices. Here are five high-yield midstream stocks to buy and hold for the long term:

1. Energy Transfer (ET): Energy Transfer offers a hefty 7.4% yield, well covered by its distributable cash flow. Its fee-based contracts, including take-or-pay terms, ensure stable revenue. The company is positioned to benefit from the Permian Basin's growing power demand and LNG exports. Energy Transfer is shifting into growth mode, increasing its capital expenditure to $5 billion in 2025 [2].

2. Enterprise Products Partners (EPD): Enterprise Products Partners has a robust distribution with a 6.8% yield, backed by a solid balance sheet. Its conservative management and steady business model have resulted in 26 consecutive years of distribution hikes. The company is pursuing growth projects, with $6 billion set to go live in 2025 [1, 2].

3. Western Midstream Partners (WES): Western Midstream offers a high 9.4% yield, supported by a rock-solid balance sheet. Its leverage ratio is below 3, ensuring consistent results. The company is targeting mid-single-digit annual distribution increases and has a significant expansion project, the Pathfinder produced-water system [2].

4. Plains All American Pipeline (PAP): Plains All American Pipeline is a midstream operator with a strong balance sheet and a history of steady distribution growth. It has been delivering double-digit distribution growth for several years and has a 7.5% yield covered 1.5 times by cash flow [2].

5. Sunoco Logistics Partners (SXL): Sunoco Logistics Partners has a 7.5% yield, backed by a solid balance sheet with leverage at just 3.3 times. The company's growth is driven by its natural gas and NGL segment, which handles about 10% of U.S. production. Sunoco Logistics is doubling its expansion capex to $1.7 billion in 2025 [2].

These midstream stocks offer dependable cash flow, fund generous distribution payouts, and are set to benefit from surging demand for natural gas tied to artificial intelligence, data centers, and LNG exports. They provide a solid foundation for long-term income investors.

References:
[1] https://finance.yahoo.com/news/best-high-yield-midstream-stock-080000996.html
[2] https://finance.yahoo.com/news/5-brilliant-high-yield-midstream-083400694.html