Midstream Energy Stocks: High Yields and Steady Growth
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Apr 29 2026
0mins
Source: Fool
- Energy Transfer: AI Winner: Energy Transfer (ET) boasts a 7% dividend yield and operates one of the largest integrated midstream systems in the U.S., particularly well-positioned in the Permian Basin, which is expected to provide stable natural gas supplies for AI infrastructure, thus driving future high-return growth projects.
- MPLX: Double-Digit Distribution Growth: MPLX offers a 7.8% yield and has increased its distribution by over 10% annually for the past four years, including a 12.5% increase in 2025, with plans to maintain similar growth rates in 2026 and 2027, indicating strong growth potential in Texas and along the Gulf Coast.
- Enterprise Products Partners: Consistency King: Enterprise Products Partners (EPD) has raised its dividend for 27 consecutive years, currently yielding 5.8%, and is expected to achieve double-digit EBITDA and cash flow growth following the completion of several projects in 2026, making it a reliable long-term investment despite this being a transition year.
- Capital Expenditure Growth: MPLX has increased its growth capital expenditures from $2 billion to $2.4 billion this year, reflecting a strong investment intent in its natural gas and NGL operations, further solidifying its competitive position in the midstream energy market.
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Analyst Views on ET
Wall Street analysts forecast ET stock price to rise
11 Analyst Rating
7 Buy
4 Hold
0 Sell
Moderate Buy
Current: 19.420
Low
17.00
Averages
20.65
High
23.00
Current: 19.420
Low
17.00
Averages
20.65
High
23.00
About ET
Energy Transfer LP owns and operates a diversified portfolios of energy assets in the United States, with more than 140,000 miles of pipeline and associated energy infrastructure. The Company’s strategic network spans 44 states with assets in all of the major United States production basins. Its core operations include complementary natural gas midstream, intrastate and interstate transportation and storage assets; crude oil, natural gas liquids (NGL) and refined product transportation and terminalling assets; and NGL fractionation. The Company’s segments include intrastate transportation and storage, interstate transportation and storage, midstream, NGL and refined products transportation and services, crude oil transportation and services, investment in Sunoco LP, investment in USA Compression Partners, LP (USAC), and all other. It also owns Lake Charles LNG Company, LLC, its wholly owned subsidiary, which owns an LNG import terminal and regasification facility.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Analysis of Dividend Growth Potential in Energy Stocks
- Chevron's Dividend Advantage: Chevron has increased its dividend for 39 consecutive years and expects earnings per share and free cash flow to grow by at least 10% annually, making its 3.9% forward dividend yield sustainable and attractive to income investors.
- Energy Transfer's High Yield Distribution: Energy Transfer offers a distribution yield of 6.9%, which was reduced during the pandemic but has since recovered and surpassed pre-pandemic levels, demonstrating the company's strong distribution capacity amid rising natural gas demand.
- Enterprise Products Partners' Solid Finances: Enterprise Products Partners has increased its distribution for 27 consecutive years, with a distribution yield exceeding 5.7%, and its robust balance sheet with $3.3 billion in liquidity ensures continued dividend sustainability, appealing to income investors.
- Natural Gas Demand Drivers: With the increasing demand for natural gas from AI data centers, Chevron, Energy Transfer, and Enterprise Products Partners are all well-positioned to benefit and drive future dividend growth.
See More
Top High-Yield Energy Stocks to Buy Now
- Chevron's Steady Growth: Chevron (CVX), the world's third-largest energy company, has increased its dividend for 39 consecutive years, with a current yield of approximately 3.9%, and is expected to grow earnings per share and free cash flow by at least 10% annually, which will further drive dividend increases and enhance investor confidence.
- Energy Transfer's High Yield: Energy Transfer (ET) operates over 144,000 miles of pipelines, currently offering a distribution yield of 6.9%, and despite a temporary reduction during the pandemic, it has now surpassed pre-pandemic levels, positioning itself to benefit from the growing demand for natural gas, particularly from AI data centers.
- Enterprise Products Partners' Financial Strength: Enterprise Products Partners (EPD) has increased its distribution for 27 consecutive years, with a yield exceeding 5.7%, and its strong balance sheet with around $3.3 billion in liquidity gives it the highest credit rating in the midstream energy sector, allowing it to capitalize on rising natural gas demand.
- Driving Natural Gas Demand: As AI data centers increase their electricity needs, natural gas emerges as the ideal fuel, with Chevron, Energy Transfer, and Enterprise Products Partners actively signing supply agreements to secure competitive advantages in the future market.
See More
Long-Term Investment Outlook for Energy Stocks
- Energy Transition Opportunities: With surging oil prices due to the war with Iran and the closure of the Strait of Hormuz, energy stocks have received a strong boost this year, particularly in the midstream sector where pipeline companies benefit from their fee-based models and are expected to see long-term growth.
- Growth Potential of Energy Transfer: Energy Transfer (ET) owns one of the largest midstream systems in the U.S., with a projected capital expenditure budget between $5.5 billion and $5.9 billion for 2023, and its strong position in the Permian Basin is expected to yield mid-teens returns.
- Stability of Enterprise Products Partners: Enterprise Products Partners (EPD) has increased its distribution for 27 consecutive years and is expected to generate $1 billion in free cash flow this year for debt repayment and stock buybacks, showcasing its robust performance in the midstream space.
- Growth Strategy of Williams Companies: Williams Companies (WMB) plans to invest $7 billion to $7.6 billion in growth projects in 2023, with a backlog of $15.5 billion in transmission projects and $9.6 billion in power solutions, aiming for over 20% return on invested capital and becoming a key energy supplier for AI data centers.
See More
Jefferies Upgrades Energy Transfer to Buy with $23 Price Target
- Rating Upgrade: Jefferies has upgraded Energy Transfer from Hold to Buy, raising the price target from $21 to $23, reflecting the company's ongoing success in natural gas and liquids, alongside potential benefits from rising commodity prices.
- Improved Fundamentals: Analyst Julien Dumoulin-Smith notes that Energy Transfer's fundamentals are stronger than when coverage began, driven by U.S. production trends and rising gas-oil ratios in the Permian, indicating enhanced competitive positioning.
- Project Acceleration: The company has sanctioned over $9 billion in projects since December 2024, which is expected to drive an EBITDA compound annual growth rate of approximately 4.8%, significantly above Wall Street consensus, highlighting the company's growth potential.
- Capital Expenditure Outlook: Energy Transfer anticipates $5 billion to $5.5 billion in annual growth capex through FY 2030, with the analyst suggesting that this forecast may underestimate the company's actual growth opportunities, further boosting investor confidence.
See More
Midstream Energy Companies Thrive Amid AI Data Center Boom
- AI Data Center Growth: The surge in demand for uninterrupted power from AI data centers has led to at least a 19% increase in stock prices for midstream energy companies like Enterprise Products Partners, Enbridge, and Energy Transfer, reflecting strong market demand and investor confidence.
- Attractive Dividends: Enterprise Products Partners has raised its dividend for 28 consecutive years, with a 2.8% increase this year to $0.55 per quarter, resulting in a current yield of approximately 5.58%, showcasing its robust cash flow coverage.
- Stable Financial Model: All three companies utilize a toll-road financial model, with 85% to 98% of cash flows derived from long-term contracts, ensuring stable revenue in inflationary environments; Enterprise Products Partners and Energy Transfer maintain distribution coverage ratios of about 1.7 to 1.8, providing ample free cash flow for new project investments.
- Energy Transfer's Expansion Potential: Among the three, Energy Transfer stands out due to its favorable valuation and highest dividend yield, with an aggressive expansion strategy aimed at capturing the AI data center boom, presenting strong growth potential despite certain risks, making it a prime investment choice currently.
See More
Midstream Energy Companies Show Significant Dividend Growth
- Dividend Growth Trend: Enterprise Products Partners has raised its dividend for 28 consecutive years, with a 2.8% increase this year to $0.55 per quarter, resulting in a current yield of 5.58%, indicating strong cash flow coverage and potential for future increases.
- Strong Performance: In Q1 2026, Enterprise Products Partners reported adjusted EBITDA of $2.7 billion, a 10% year-over-year increase, driven by record natural gas liquids production, with DCF rising 34.5% compared to the same quarter last year, further solidifying its market position.
- Impact of Energy Transition: The rise of data centers and AI is driving growth for midstream companies like Enbridge and Energy Transfer, the latter boasting a dividend yield of 6.6% and having consistently raised its distribution for 18 consecutive quarters, showcasing its competitive edge in the market.
- Optimistic Market Outlook: Despite potential oil price fluctuations affecting midstream pipeline volumes, the long-term contract-based fee model of all three companies demonstrates strong financial resilience, with expectations to continue benefiting from the demand generated by AI data centers.
See More
Analysis of Dividend Growth Potential in Energy Stocks
- Chevron's Dividend Advantage: Chevron has increased its dividend for 39 consecutive years and expects earnings per share and free cash flow to grow by at least 10% annually, making its 3.9% forward dividend yield sustainable and attractive to income investors.
- Energy Transfer's High Yield Distribution: Energy Transfer offers a distribution yield of 6.9%, which was reduced during the pandemic but has since recovered and surpassed pre-pandemic levels, demonstrating the company's strong distribution capacity amid rising natural gas demand.
- Enterprise Products Partners' Solid Finances: Enterprise Products Partners has increased its distribution for 27 consecutive years, with a distribution yield exceeding 5.7%, and its robust balance sheet with $3.3 billion in liquidity ensures continued dividend sustainability, appealing to income investors.
- Natural Gas Demand Drivers: With the increasing demand for natural gas from AI data centers, Chevron, Energy Transfer, and Enterprise Products Partners are all well-positioned to benefit and drive future dividend growth.
See More
Top High-Yield Energy Stocks to Buy Now
- Chevron's Steady Growth: Chevron (CVX), the world's third-largest energy company, has increased its dividend for 39 consecutive years, with a current yield of approximately 3.9%, and is expected to grow earnings per share and free cash flow by at least 10% annually, which will further drive dividend increases and enhance investor confidence.
- Energy Transfer's High Yield: Energy Transfer (ET) operates over 144,000 miles of pipelines, currently offering a distribution yield of 6.9%, and despite a temporary reduction during the pandemic, it has now surpassed pre-pandemic levels, positioning itself to benefit from the growing demand for natural gas, particularly from AI data centers.
- Enterprise Products Partners' Financial Strength: Enterprise Products Partners (EPD) has increased its distribution for 27 consecutive years, with a yield exceeding 5.7%, and its strong balance sheet with around $3.3 billion in liquidity gives it the highest credit rating in the midstream energy sector, allowing it to capitalize on rising natural gas demand.
- Driving Natural Gas Demand: As AI data centers increase their electricity needs, natural gas emerges as the ideal fuel, with Chevron, Energy Transfer, and Enterprise Products Partners actively signing supply agreements to secure competitive advantages in the future market.
See More
Long-Term Investment Outlook for Energy Stocks
- Energy Transition Opportunities: With surging oil prices due to the war with Iran and the closure of the Strait of Hormuz, energy stocks have received a strong boost this year, particularly in the midstream sector where pipeline companies benefit from their fee-based models and are expected to see long-term growth.
- Growth Potential of Energy Transfer: Energy Transfer (ET) owns one of the largest midstream systems in the U.S., with a projected capital expenditure budget between $5.5 billion and $5.9 billion for 2023, and its strong position in the Permian Basin is expected to yield mid-teens returns.
- Stability of Enterprise Products Partners: Enterprise Products Partners (EPD) has increased its distribution for 27 consecutive years and is expected to generate $1 billion in free cash flow this year for debt repayment and stock buybacks, showcasing its robust performance in the midstream space.
- Growth Strategy of Williams Companies: Williams Companies (WMB) plans to invest $7 billion to $7.6 billion in growth projects in 2023, with a backlog of $15.5 billion in transmission projects and $9.6 billion in power solutions, aiming for over 20% return on invested capital and becoming a key energy supplier for AI data centers.
See More
Jefferies Upgrades Energy Transfer to Buy with $23 Price Target
- Rating Upgrade: Jefferies has upgraded Energy Transfer from Hold to Buy, raising the price target from $21 to $23, reflecting the company's ongoing success in natural gas and liquids, alongside potential benefits from rising commodity prices.
- Improved Fundamentals: Analyst Julien Dumoulin-Smith notes that Energy Transfer's fundamentals are stronger than when coverage began, driven by U.S. production trends and rising gas-oil ratios in the Permian, indicating enhanced competitive positioning.
- Project Acceleration: The company has sanctioned over $9 billion in projects since December 2024, which is expected to drive an EBITDA compound annual growth rate of approximately 4.8%, significantly above Wall Street consensus, highlighting the company's growth potential.
- Capital Expenditure Outlook: Energy Transfer anticipates $5 billion to $5.5 billion in annual growth capex through FY 2030, with the analyst suggesting that this forecast may underestimate the company's actual growth opportunities, further boosting investor confidence.
See More
Midstream Energy Companies Thrive Amid AI Data Center Boom
- AI Data Center Growth: The surge in demand for uninterrupted power from AI data centers has led to at least a 19% increase in stock prices for midstream energy companies like Enterprise Products Partners, Enbridge, and Energy Transfer, reflecting strong market demand and investor confidence.
- Attractive Dividends: Enterprise Products Partners has raised its dividend for 28 consecutive years, with a 2.8% increase this year to $0.55 per quarter, resulting in a current yield of approximately 5.58%, showcasing its robust cash flow coverage.
- Stable Financial Model: All three companies utilize a toll-road financial model, with 85% to 98% of cash flows derived from long-term contracts, ensuring stable revenue in inflationary environments; Enterprise Products Partners and Energy Transfer maintain distribution coverage ratios of about 1.7 to 1.8, providing ample free cash flow for new project investments.
- Energy Transfer's Expansion Potential: Among the three, Energy Transfer stands out due to its favorable valuation and highest dividend yield, with an aggressive expansion strategy aimed at capturing the AI data center boom, presenting strong growth potential despite certain risks, making it a prime investment choice currently.
See More
Midstream Energy Companies Show Significant Dividend Growth
- Dividend Growth Trend: Enterprise Products Partners has raised its dividend for 28 consecutive years, with a 2.8% increase this year to $0.55 per quarter, resulting in a current yield of 5.58%, indicating strong cash flow coverage and potential for future increases.
- Strong Performance: In Q1 2026, Enterprise Products Partners reported adjusted EBITDA of $2.7 billion, a 10% year-over-year increase, driven by record natural gas liquids production, with DCF rising 34.5% compared to the same quarter last year, further solidifying its market position.
- Impact of Energy Transition: The rise of data centers and AI is driving growth for midstream companies like Enbridge and Energy Transfer, the latter boasting a dividend yield of 6.6% and having consistently raised its distribution for 18 consecutive quarters, showcasing its competitive edge in the market.
- Optimistic Market Outlook: Despite potential oil price fluctuations affecting midstream pipeline volumes, the long-term contract-based fee model of all three companies demonstrates strong financial resilience, with expectations to continue benefiting from the demand generated by AI data centers.
See More
