Forget Growth Stocks: 6 Energy Giants Paying Massive Yields Are Flashing ‘Buy’
While growth stocks grab the spotlight, six midstream energy giants are quietly flooding investor accounts with cash every quarter, and some have already locked in double-digit distribution increases for years to come.
Growth stocks get the headlines, but midstream partnerships send investors cash every quarter while they wait. Pipeline, NGL, and export volumes hit record highs across the group this year. Several operators raised full-year guidance at midyear. The top yielder of the six pays 7.97%. Below, we first check each payout for coverage, cash flow, and balance sheet strength, then consider yield.
Enterprise Products Partners: 1.9x Coverage on Record Volumes
Enterprise Products Partners (NYSE:EPD | EPD Price Prediction) yields 5.99% at a recent price of $36.74. That puts it in high-yield territory and makes it the most conservative payer in this group. The latest quarterly distribution of $0.56 annualizes to $2.24, up 2.8% from a year earlier.
Dividend safety: Operational distributable cash flow of $2.3 billion covered the distribution 1.9x last quarter, and the partnership kept $1.1 billion for growth projects and buybacks. Leverage stands at the company’s 3.0 target, and about 97% of its debt has fixed rates. The quarterly payout rose from $0.45 in 2021 to today’s level, and the company has a payment back to January 27, 1999.
Bull case: Enterprise has $6.5 billion of organic projects under construction, with an LPG export expansion scheduled for completion by year-end. It trades at about 12x forward earnings.
Risk: Management said demand surges tied to the Middle East added roughly $200 million in April and May, and those conditions have since returned to normal.
Energy Transfer: Ultra-High Yield Backed by Raised Guidance
Energy Transfer (NYSE:ET) is an ultra-high-yield name, paying 6.49% at $20.52. Its quarterly distribution of $0.34 ($1.36 annualized) is more than 3% above the year-ago payout.
Dividend safety: Adjusted distributable cash flow reached about $2.6 billion last quarter, up from about $2.0 billion a year earlier. Management raised full-year adjusted EBITDA guidance to $18.8 billion to $19.1 billion. It targets 3% to 5% annual growth and leverage of 4 to 4.5 times EBITDA.
Bull case: The Hugh Brinson Pipeline has entered commercial service. A new ethane export expansion has 100% of its capacity committed under contracts running into the 2040s. Energy Transfer also reached a cash-and-stock deal announced this week to acquire Vaquero Midstream. Management summed up its view this way: “We’re just not seeing the slowdown” in data center and power plant demand.
Risk: Interest expense is climbing as the capital structure grows, and growth capex is set at $5.6 billion to $5.9 billion for this year.
MPLX: Double-Digit Raises Already Promised Through 2027
MPLX (NYSE:MPLX) yields 7.51% at $57.18, making it an ult. The quarterly payout of $1.0765 annualizes to $4.306.
Dividend safety: Distributable cash flow of $1.45 billion covered the distribution well last quarter, and management targets 1.3 coverage for 2026, 2027, and beyond. Leverage of 3.7x is below its 4.0x target. The payout has stepped up every year in the data, from 0.705 in 2022 to 0.775, 0.85, 0.9565, and now 1.0765. Each raise has come with the November payment.
Bull case: Management said it expects to grow the distribution by 12.5% again in both 2026 and 2027, and it does not need acquisitions to hit its 2027 coverage goal. Harmon Creek III began operations in August.
Risk: MPLX counts on its sponsor, Marathon Petroleum, for a significant share of revenue.
Western Midstream: Top Yield of the Group After a Free Cash Flow Guidance Raise
Western Midstream Partners (NYSE: WES) has the highest yield here at 7.97%, with units trading at $45.98. The quarterly distribution of $0.93 annualizes to $3.72, and management confirmed full-year guidance of at least $3.70.
Dividend safety: Management raised its free cash flow guidance midpoint to $1.20 billion, up 20%, and lifted the distributable cash flow midpoint to $2.15 billion. Adjusted EBITDA hit a record $736.5 million last quarter. The record includes a 2020 reset from $0.622 to $0.311. The payout has since rebuilt to $0.93.
Bull case: The Brazos Delaware acquisition adds about 460 MMcf/d of gas processing, and Delaware Basin gas throughput reached a new high. They trade at about 11x forward earnings.
Risk: Second-quarter free cash flow after distributions was negative $111 million because of organic growth spending.
Plains All American: More Permian Crude Behind an Ultra-High Yield
Plains All American Pipeline (NASDAQ:PAA) yields 6.83% at $24.31. Its declared quarterly distribution of $0.4175 ($1.67 annualized) is payable on November 13.
Dividend safety: The payout has grown every year since 2021, going from $0.18 to $0.2675 in 2023, $0.3175 in 2024, $0.38 in 2025, and $0.4175 this year. Payouts were higher before 2017, including $0.70 in 2016, so the company has paid more in the past. Pro forma 2025 net income attributable to Plains came to $975M.
Bull case: Plains now operates the Cactus III Pipeline after closing the EPIC Crude acquisition. On a pro forma basis, EPIC added $96M of operating income for 2025. They trade at 8.29 times EV/EBITDA.
Risk: The deal adds $94 million of interest on $1.901 billion of financing, which cuts pro forma EPS to $1.01 from $1.12.
Sunoco: Seven Straight Raises as Cash Flow Doubles
Sunoco (NYSE:SUN) is the only fuel distributor in this group, and it also runs terminals and pipelines. The stock pays 5.5% at $73.28, making it a high-yield option. The latest quarterly payout of $1.0023 annualizes to 4.0092.
Dividend safety: The payout history shows seven straight quarterly increases, from 0.8756 to 1.0023. Distributable cash flow doubled to $608 million, and adjusted EBITDA rose from $454 million to $982 million. Management targets distribution growth of at least 5% per year.
Bull case: Full-year adjusted EBITDA guidance went up by $400 million to $3.5 billion to $3.7 billion. The fuel margin widened to 17.1 cents/gal from 10.5 cents/gal after the Parkland deal.
Risk: Leverage stands at about 3.7x net debt to adjusted EBITDA, with roughly $13.3 billion of long-term debt to manage during the Parkland integration.
Six Energy Payers With Growing Cash Flow Behind the Checks
Enterprise Products offers the best coverage and balance sheet. MPLX and Western Midstream pay the highest yields, and MPLX has already committed to double-digit increases. Energy Transfer, Plains, and Sunoco add raised guidance, newly acquired volumes, and a quarter-after-quarter raise run. All six have record volumes and growing cash flow behind their distributions.
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Lee Jackson has covered Wall Street analysts' equity and debt research and equity strategy daily for 24/7 Wall St. since 2012. His broad, diverse career, including a stint as creative services director at an NBC affiliate in Austin, Texas, gives him unique insight into the financial industry.
Lee Jackson's journey in the financial industry spans more than 30 years, including nearly two decades as an institutional equity salesperson at Bear Stearns, Lehman Brothers, and Morgan Stanley. His career spanned pivotal sell-side Wall Street events, from the dot-com rise and bubble to the Long-Term Capital Management debacle, 9/11, and the Great Recession of 2008. This reflects his resilience and adaptability amid market volatility.
Lee Jackson’s practical financial industry experience, gained through a career at some of the biggest banks and brokerage firms, is complemented by a lifetime of writing across various platforms. This unique combination allows him to shed light on the intricacies of Wall Street in a way only someone with deep insider experience and knowledge can. Moreover, his extensive network across Wall Street continues to provide direct access for him and 24/7 Wall St., a privilege few firms enjoy.
Since 2012, Jackson’s work for 24/7 Wall St. has been featured in Barron’s, Yahoo Finance, MarketWatch, Business Insider, TradingView, Real Money, The Street, Seeking Alpha, Benzinga, and other media outlets. He attended the prestigious Cranbrook Schools in Bloomfield Hills, Michigan, and has a degree in broadcasting from the Specs Howard School of Media Arts.
