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Markets Score 25 Bullish

Two Midstream MLPs Poised for Dividend Growth: Energy Transfer and Enterprise Products Partners

Apr 03, 2026 11:05 UTC
ET
Long term

Energy Transfer and Enterprise Products Partners are highlighted for their high yields and growth potential in the midstream sector. Both stocks offer strong cash flow and distribution coverage, making them attractive for income-focused investors.

  • Energy Transfer (ET) offers a 7% yield with growth projects in the Permian Basin.
  • Enterprise Products Partners (EPD) has a 5.8% yield and 27 consecutive years of distribution increases.
  • Both MLPs operate fee-based businesses with strong cash flow visibility.
  • Improved industry conditions and AI-driven power demand support growth.
  • Energy Transfer and Enterprise Products Partners have conservative balance sheets and distribution coverage.

Energy Transfer (NYSE: ET) and Enterprise Products Partners (NYSE: EPD) are two midstream master limited partnerships (MLPs) that have become top choices for investors seeking stable dividend growth. These companies operate extensive pipeline networks in the U.S., generating consistent cash flows that support robust distributions. Energy Transfer currently offers a 7% yield, bolstered by its natural gas infrastructure in the Permian Basin and two major projects to transport gas to high-demand areas. Enterprise Products Partners, with a 5.8% yield, has increased its distribution for 27 consecutive years, reflecting its conservative management and strong balance sheet. Both MLPs benefit from improved industry conditions and rising power demand driven by AI data centers. Energy Transfer has strengthened its balance sheet and maintains a solid distribution coverage ratio, while Enterprise Products Partners operates with a leverage ratio of 3.3 and a largely fee-based business model. These characteristics make them appealing for long-term income strategies, though investors should note that rapid wealth generation is not typical in this sector. The Motley Fool Stock Advisor team recently highlighted other stocks for potential high returns, but Energy Transfer and Enterprise Products Partners remain strong candidates for those prioritizing steady, growing dividends.

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