Western Midstream vs. MPLX: Which Ultra-High-Yield Pipeline Payout Is the Better Buy?
Both pipeline partnerships yield above 7% and just reported earnings, but the trade-off between a fatter payout today and a faster-growing one tomorrow forces a real choice for income investors.
Western Midstream Partners (NYSE:WES | WES Price Prediction) and MPLX (NYSE:MPLX) reported second-quarter results in early August, with both yielding above 7%. The businesses behind those payouts look very different. WES is a Delaware Basin specialist that moves gas, crude, and produced water. MPLX is a giant controlled by Marathon Petroleum (NYSE:MPC) that is building a Permian-to-Gulf Coast export chain. For income investors, the choice comes down to yield today or raises tomorrow.
Produced Water Powers WES as MPLX Grinds Out Gas Gains
WES beat expectations, posting EPS of $0.99 on $0.92 and record adjusted EBITDA of $736.5 million, up 19%. Produced water led the way, with Delaware throughput reaching a record 2,993 MBbls/d. Management called water “our fastest-growing product line” and raised 2026 free cash flow guidance 20% to $1.2 billion. That correction came in a single quarter.
MPLX had a slower quarter. EPS of $1.06 met expectations, but revenue of $3.08 billion fell short of estimates. Gathering throughput rose 15% to 6,859 MMcf/d, and Marcellus plants ran at 96% usage, close to full capacity. Crude pipeline volumes fell 5% while Marathon’s refineries were down for maintenance. MPLX’s results closely track its sponsor.
| Metric | WES | MPLX |
|---|---|---|
| Forward distribution | $3.72 | $4.306 |
| Current yield | 8.2% | 7.3% |
| Latest annual raise | 2.2% | 12.5% |
| Leverage | ~3.15x | 3.7x |
Bigger Yield Today or Faster Raises Through 2027?
WES pays more today, but its quarterly payout has stayed at $0.93 since early 2026. The October 19 declaration kept it there. The 2.2% step up from $0.91 is a small raise for income holders. After distributions, second-quarter free cash flow was negative by $111 million because Pathfinder and North Loving II soaked up capital.
MPLX raised its payout 12.5% to $1.0765 and plans the same increase in 2026 and 2027. CEO Maryann Mannen said 2027 growth is “in hand” from projects already funded. Management targets 1.3x coverage “for both 2026 and 2027 and frankly, beyond.” Harmon Creek III, Blackcomb and the BANGL expansion all come online in the second half of this year, so real assets back that promise.
K-1 Forms Come Standard With Both
Both are master limited partnerships. You collect distributions and get a K-1 tax form instead of a 1099. If you hold them in an IRA, $1,000 or more of unrelated business income means the IRA must file Form 990-T. That is why I keep MLPs in taxable accounts.
Why MPLX Holds the Edge on Payout Growth
MPLX has the stronger case for income growth. One more 12.5% raise would lift its yield to about 8.2% on today’s price, matching WES. MPLX also has two years of committed growth and a coverage buffer. WES suits investors who want the most cash right now and trust its water expansion.
MPLX’s key risk is its sponsor. Marathon Petroleum owns about 647 million of around 1,014 million units and is MPLX’s main customer, so a decline in refining would hit cash flow. WES’s key risk is commodity prices. Its fixed recovery contracts tie results to commodities, and management has already guided third-quarter per-unit margins slightly lower. I would revisit WES if Pathfinder starts on schedule in Q1 2027 and prices pick up again.
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Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.
