The pursuit of growth is not every investor’s top priority. In fact, as you get closer to retirement, finding a steady stream of dividend income becomes more important. One of the best places to find high yield stocks There is a midstream energy sector with increasing distribution. Master Limited Partnership (MLP).
MLPs come with a little extra paperwork at tax time, but they have the added benefit that most of their distributions are classified as return of capital. Thus, investors keep their shares tax-deferred until they sell them. Let’s take a look at three high-yield MLPs to buy now and hold forever.
energy transfer
With its valuation, yield and growth opportunities, energy transfer (ET +1.67%) Energy is one of the most attractive stocks in the patch. The stock currently has a well-supported 6.9% yield, with plans to increase its distribution from 3% to 5%. Meanwhile, its multiplier enterprise value For earnings before interest, taxes, depreciation and amortization (EBITDA) — The most common way to value MLPs is at 8.5x 2026 analyst estimates, which is one of the cheapest valuations in the sector.
today’s change
(1.67%) $0.34
current price
$20.43
key data points
market cap
$69B
day limit
$20.07 -$20.47
52wk range
$16.18 -$20.66
volume
5.8M
average volume
16m
gross margin
11.57%
dividend yield
6.64%
The company operates one of the largest integrated midstream systems in the US, and its strong position in the Permian Basin has given it one of the strongest development pipelines of any company in the region. That’s because the Permian is one of the cheapest sources of natural gas in the US, and utilities and data center operators are clamoring for low-cost energy to power artificial intelligence.
Energy Transfer is building several large, significant pipeline projects and has several high return projects coming on line over the next few years that will help drive growth. This stock is my favorite and one of my largest positions.
Enterprise Product Partners
For income-focused investors who value stability above all else, Enterprise Product Partners (EPD +1.46%) There is stock for them. The company has grown its distribution for 27 consecutive years across various business and energy cycles.
It is conservative in nature, with low leverage for the space (3.2x) and low-interest debt that does not mature for an average of 17 years. It currently yields 5.8% and its payout increased 2.8% in the first quarter.
Enterprise Product Partners
today’s change
(1.46%) $0.56
current price
$38.85
key data points
market cap
$83B
day limit
$38.40 -$38.93
52wk range
$30.01 -$39.73
volume
112K
average volume
4.4M
gross margin
13.45%
dividend yield
5.72%
The enterprise has several development projects expected to come up later this year that are expected to help generate strong double-digit growth in EBITDA next year. However, it has cut its capital spending, which will give it considerable flexibility to buy back stock, reduce debt or make acquisitions.
Overall, Enterprise is a great stock if you like to sleep well at night, and it should be a strong consideration for any income investor.
Image Source: Getty Images.
western midstream
Western Midstream Partners (WES +1.06%) Its yield is 8.5%, which is the highest in this group. And its high yield is not a sign that the company is in trouble or not growing its distribution.
It just reported strong first-quarter results and said it now expects its adjusted EBITDA to come in at the high end of its $2.7 billion guidance, up from its previous $2.6 billion. Meanwhile, its leverage at a multiple of 3 is very low, and it plans to raise its distribution to the mid to low single digits.
The company is also very optimistic about 2027, noting that one of the largest producers on its Powder River Basin system is increasing drilling, which should increase volumes on the system next year. Also, improved natural gas spreads are expected to improve volumes in the Permian as more takeaway capacity comes on line later this year.
Western Midstream Partners
today’s change
(1.06%) $0.48
current price
$45.87
key data points
market cap
$18B
day limit
$45.12 -$46.12
52wk range
$36.90 -$46.12
volume
42K
average volume
1.6m
gross margin
51.54%
dividend yield
8.06%
The company made a surprise acquisition by purchasing Permian-based Brazos for $1.6 billion. The purchase brings with it a set of assets in natural gas, natural gas liquids and crude oil, and should add $200 million in EBITDA in 2027. The deal will not impact Western’s current leverage multiplier of 3 and will continue to build the company’s presence in the Permian.
This is a solid stock for investors looking for high yield.