4 Brilliant Ultra-Yield Pipeline Stocks to Buy Now and Hold for the Long Term

Key Points

• Energy Transfer has cleaned up its balance sheet and is now in growth mode.

• Enterprise Products Partners has been a model of consistency.

• Western Midstream and MPLX have been making acquisitions to help drive growth.

• 10 stocks we like better than Energy Transfer ›

Pipeline stocks don’t always get a lot of attention from the market, but they can be some of the best long-term income generators. For investors wanting high yields, this sector is one of the best spaces to look.

Let’s look at four high-yield master limited partnerships (MLPs) to buy now for the long term.

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1. Energy Transfer: 7.7% Yield

Energy Transfer (NYSE: ET) has done a nice job cleaning up its balance sheet over the past few years. After leverage got a bit too high right around when the COVID-19 pandemic struck, the company slashed its distribution and was able to quickly reduce its leverage. Today, its leverage is toward the low end of its targeted range, and its distribution is above where it was before the cut. The company also strengthened its contracts, with the highest percentage of take-or-pay agreements in its history.

That shift allowed Energy Transfer to go back on offense with a huge slate of new growth projects. This year alone, the pipeline giant will spend about $5 billion on expansion projects, up from only $3 billion a year ago. Those projects are tied to natural gas demand in power-hungry regions like Texas and the Southwestern U.S., and it also keeps pushing ahead on liquified natural gas (LNG), with its Lake Charles (Louisiana) LNG export facility project finally starting to gain real traction. On top of that, the company’s natural gas pipeline system is well-positioned to deliver natural gas to data centers, which are only going to need more energy as artificial intelligence (AI) usage expands.

Energy Transfer’s distribution is well covered by its distributable cash flow (operating cash flow minus maintenance capital expenditures), while 90% of its EBITDA comes from fee-based operations that are not impacted by energy prices or spreads. Management has already raised its distribution for 15 straight quarters, and it still sees room for 3% to 5% annual growth moving forward.

Taken all together, Energy Transfer is one of the best high-yield opportunities out there.

2. Enterprise Products Partners: 6.9% Yield

If you’re looking for consistency, look no further than Enterprise Products Partners (NYSE: EPD). The company has now raised its distribution for 27 straight years, and it’s easy to see why.

Enterprise has always taken a conservative approach, and has one of the best balance sheets in the midstream space with leverage just over 3x and debt locked in for nearly two decades at very low rates. Meanwhile, around 80% of its business is fee-based, with much of it locked into take-or-pay deals with inflation adjustments.

While Enterprise is known for its conservative nature, it is willing to pursue attractive growth opportunities when it sees them. The company has ramped up its growth capital expenditures (capex) this year to more than $4 billion, which is a big jump from just $1.6 billion a few years ago. With returns on invested capital (ROIC) consistently around 13% in recent years, these projects should deliver solid growth in 2026 and beyond.

For income-oriented investors, Enterprise is one of the best names to own.

3. Western Midstream: 9.6% Yield

Western Midstream (NYSE: WES) offers the highest payout in this group, with a yield that is close to double digits. What makes the stock attractive is that the payout is backed by contracts that make cash flow very predictable, thanks in part to its close relationship with parent Occidental Petroleum (NYSE: OXY), which owns more than 40% of Western.

Much of Western’s revenue comes from minimum volume commitments and cost-of-service agreements, which reduces risk. That strong base is letting the company step into new growth areas like produced water, where it is building the massive Pathfinder system that will eventually handle over 800,000 barrels per day.

On top of that, Western just bought Aris Water Solutions for $2 billion. The deal brings big synergies and acreage dedications. Leverage sits at around 3x, and management expects to steadily grow its payout. Investors get a nearly 10% yield today, and the potential for more down the line.

4. MPLX: 7.6% Yield

MPLX (NYSE: MPLX) combines a strong yield with some of the best growth in the midstream sector. The company has boosted its annual distribution by more than 10% for three years running, most recently by 12.5% in 2024. Even after those hikes, its coverage is still solid at 1.5x, and leverage is only a touch over 3x.

Its business is split into two pieces. Its crude logistics arm is tied to parent Marathon Petroleum (NYSE: MPC), which brings a lot of stability. Its bigger growth driver, though, is its natural gas and NGL segment. With natural gas demand climbing from exports and new power generation, MPLX doubled its growth capex this year to $1.7 billion.

MLPX has also leaned into M&A. It recently completed the $2.4 billion purchase of Northwind Midstream, which expands its gas treating in the Delaware Basin and took full ownership of the BANGL pipeline, which transports NGLs from the Permian to the Gulf Coast. Meanwhile, it just agreed to sell its Rockies gathering and processing assets for $1 billion to focus more on the Permian.

MPLX is in great financial shape and isn’t afraid to make moves to help reshape its business. As such, it’s another MLP worth owning for the long haul.

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Geoffrey Seiler has positions in Energy Transfer, Enterprise Products Partners, and Western Midstream Partners. The Motley Fool recommends Enterprise Products Partners and Occidental Petroleum. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.