Here Are My Top 5 High-Yield Midstream Stocks to Buy Now
For investors in search of high yields and growing distributions, there is no better part of the market to look at than the midstream energy sector. While the players in the industry do face the risks associated with slumping energy volumes and aren't completely immune to energy price downturns, they are generally in great financial shape at the moment and seeing increased growth opportunities.Let's look at five of my favorite stocks in this space.Energy Transfer (NYSE: ET) has built out one of the largest integrated midstream systems in the U.S., and it's positioned for growth. With over 90% of its EBITDA tied to fee-based contracts, many of them take-or-pay, it generates stable, predictable cash flows that support its generous dividend, which at the current share price offers a 7.1% forward yield. In addition, its payout is well-covered by its distributable cash flow (operating cash flow minus maintenance capex), and the company is targeting 3% to 5% annual distribution growth. Continue reading
For investors in search of high yields and growing distributions, there is no better part of the market to look at than the midstream energy sector. While the players in the industry do face the risks associated with slumping energy volumes and aren't completely immune to energy price downturns, they are generally in great financial shape at the moment and seeing increased growth opportunities.
Let's look at five of my favorite stocks in this space.
Energy Transfer (NYSE: ET) has built out one of the largest integrated midstream systems in the U.S., and it's positioned for growth. With over 90% of its EBITDA tied to fee-based contracts, many of them take-or-pay, it generates stable, predictable cash flows that support its generous dividend, which at the current share price offers a 7.1% forward yield. In addition, its payout is well-covered by its distributable cash flow (operating cash flow minus maintenance capex), and the company is targeting 3% to 5% annual distribution growth.
