Let’s face it, folks. The stock market is looking shaky right now. The tech-heavy Nasdaq is down over 11% from its highs, and even the mighty Apple is struggling. Investors are running scared, worried about a potential recession and what rising interest rates will do to corporate profits.
But here’s the thing… while everyone else is panicking, smart investors like you and me know this is the perfect time to look for opportunities. We’re NOT going to chase those overhyped tech stocks. We’re going after investments that can deliver a STEADY STREAM OF INCOME, no matter what the market does.
And that’s why today, I want to talk about midstream energy MLPs.
These companies operate the pipelines and other infrastructure that transport oil and natural gas throughout the country. It’s a vital service – and it generates a mountain of cash. And the beauty is, they’re REQUIRED to distribute most of that cash to investors in the form of BIG, FAT DIVIDENDS.
But here’s the best part…
These MLPs aren’t just paying high dividends – they’re GROWING them, too. That’s right, even as inflation eats away at your savings, these companies are giving you raises, year after year.
I recently spoke with Greg Reid, co-manager of Westwood Salient MLP & Energy Infrastructure, and he confirmed what I’ve been seeing. “The beauty of this story now is that it’s [about] cash flow … and the return of money to shareholders,” he told me. “The average pipeline company yields about 6% and is increasing cash flow by 5% to 6% a year.”
So while the rest of the market is wringing its hands, midstream energy is quietly raking it in. And YOU can be a part of it.
Here are 3 MLPs to add to your watchlist today:
1. Energy Transfer LP (ET) – 8.1% Yield
Energy Transfer is a diversified midstream giant with a network of pipelines, storage facilities, and processing plants across the country. Their cash flow is booming, thanks to strong demand for energy and rising production in the Permian Basin. And as CFRA analyst Stewart Glickman points out, that cash flow is translating into fatter dividends for investors.
2. Enterprise Products Partners LP (EPD) – 6.9% Yield
Enterprise Products Partners is another dominant player in the midstream space, specializing in transporting and processing natural gas. As Jay Hatfield of Infrastructure Capital Advisors explains, “The U.S. is the Saudi Arabia of natural gas, which is good for pipelines.” Enterprise operates a highly profitable network of assets, and they have a rock-solid track record of dividend growth.
3. Enbridge (ENB) – 7.5% Yield
Enbridge is a Canadian company, but they’re a major force in North America, with a massive network of pipelines that transport oil and natural gas across the continent. Simon Lack, co-manager of Catalyst Energy Infrastructure Fund, highlights Enbridge’s conservative management and their position as the sector’s largest player. This is a company built for the long haul – and they’re sharing the profits with investors through a juicy and growing dividend.
Ready to Start Collecting Those Dividends?
I urge you to do your own research on these three MLPs. Look into their financial statements, study their management teams, and consider how they fit into your overall portfolio. But I believe that midstream energy offers a compelling combination of high yields, growth potential, and resilience in the face of a potential recession.
And if you’re skittish about MLPs and their K-1 tax forms, don’t worry! Tomorrow, I’ll show you three simple, low-cost ETFs that let you tap into the midstream energy boom without the tax hassle.
Stay tuned!