Matt DiLallo, The Motley Fool
5 min read
Most investors seem to be chasing the same energy infrastructure story right now. Surging power demand by AI data centers is fueling the need for more natural gas pipelines and power-generating facilities. That’s causing the market to sleep on more crude-oil-focused names at a time when the oil market is experiencing its biggest supply disruption in decades due to the ongoing conflict in the Middle East.
As a result, investors may be missing out on potentially lucrative income streams. Here are three high-yield pipeline stocks you won’t want to overlook if you want a big-time income stream.
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MPLX
MPLX (NYSE: MPLX) is a diversified master limited partnership (MLP; an entity that sends a Schedule K-1 Federal tax form) formed by refining giant Marathon Petroleum. It operates crude oil and petroleum products logistics assets to support Marathon’s operations and those of other third-party customers. These assets generated nearly $2.3 billion in adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) for the midstream company during the first half of this year, about 65% of the total. The company also has a smaller natural gas and NGL services platform that accounts for the remaining 35% of its adjusted EBITDA.
The MLP’s focus on crude oil and refined products leads to it being overlooked relative to other midstream companies. As a result, it has a lower valuation and higher distribution yield than its more gas-focused rivals (currently around 7.4%).
While MPLX currently makes most of its money providing crude oil and refined products logistics services, gas is its biggest growth driver. It’s investing 90% of its organic growth capital on projects to meet growing gas and NGL infrastructure needs, including new gas processing plants, additional pipelines, and NGL fractionation and export facilities. These expansions support MPLX’s growing distribution. It has increased its payout by a 12.5% in each of the past two years, and expects to continue growing it at that rate in 2026 and 2027.
Hess Midstream
Hess Midstream (NYSE: HESM) is a growth-oriented midstream company that owns oil, gas, and water-handling assets in the Williston Basin of North Dakota, one of the country’s most prolific oil-producing regions. Its assets support its parent company, Chevron (which acquired its former parent, Hess, last year), as well as third-party customers.
