7 Pipeline Stocks To Buy With Big Dividends
It’s not always easy to make a proper investment, especially when the dividends aren’t up to par with other stocks and bonds. But it’s not hard to feel safe when those dividends are what everyone wants.
It would appear that the best dividends lie within the energy sector, which holds far more promise than some other stocks.
1. Antero Midstream Corp (ticker: AM)
According to money.usnews.com, “so-called “midstream” energy companies like pipeline operator Antero may not be able to capitalize on bigger margins when oil and gas prices rise.” The better part about that insulation against any risk when the price of stocks drops. That insulation, in turn, gives people both reliable revenue and dividends. Antero Midstream’s parent company consolidated its assets my merging Antero into itself. It gives the company a better handle on operations. Years down the line, this could mean a more generous yield and greater distribution in the coming years.
Current Yield: 7.9%
2. Buckeye Partners (BPL)
Buckeye Partners “owns and operates roughly 6,000 miles of pipeline located primarily in the northeastern and midwestern United States.” In addition to the lengthy amount of pipeline retained by the company, over 100 delivery locations rely on their liquid petroleum products. Their storage capacity hits and goes over 55 million barrels worth. Chances are that if your car gets refueled near anywhere Buckeye, the gasoline has at one point gone through a BPL facility. Unlike some of the other sleepier stocks on this list, Buckeye has outperformed quite a few other stocks in the broader market. “In addition to a juicy yield, BPL stock is up more than 18% in the last 12 months.”
Current yield: 8.6%
3. DCP Midstream (DCP)
DCP is worth checking out if you’re looking to add to your stock market income.
This particular stock is far better in consistency when it comes to proper payout. “Many of these transportation and storage names have a hard link between their performance and their dividends, which can mean payouts fluctuate quarter to quarter. However, DCP paid 78 cents per share every three months since early 2015.” This, unfortunately, means that dividends stay static and do not increase a single cent. If you have no problem with long-term investment, this is a great way to find stability and consistency with DCP. The yield for this particular stock seems well worth waiting for.
Current yield: 9.3%
4. Enable Midstream Partners (ENBL)
While the majority of the Oklahoma City-based customers are natural gas companies, they have a second arm of operation that processes energy, in addition to storing and transporting associated products.
Processing facilities for the company are located in the shale fields of North Dakota, Texas, Oklahoma and other parts of the U.S.
Additionally, “its portfolio of midstream storage and transportation infrastructure assets includes 13,900 miles of pipelines and 84.5 billion cubic feet of natural gas storage capacity.” With natural gas produced through hydraulic fracturing so in demand, it makes sense to invest in ENBL, especially when they are such an important part of the onshore energy business.
Current yield: 8.8%
5. EnLink Midstream (ENLC)
The main focus of EnLink is the transportation of natural gas and crude oil. Having its headquarters in Dallas and strategically located operations in Texas and Louisiana allows it to operate a “traditional distribution business via trucks and barges in addition to its 11,000 miles of pipelines.” EnLink also operates a unique business related to fracking: brine disposal wells, where the salt water by-product of oil production is disposed of. “The unique location and characteristics of EnLink make it a key player in the 21st-century American energy business, and consistently generates revenue that leads to consistently reliable dividends.”
Current yield: 8.5%
6. MPLX LP (MPLX)
“MPLX is a $26 billion midstream powerhouse with operations across 17 states.” The company operates liquefied petroleum gas storage facilities in West Virginia, Michigan, and Illinois that can hold nearly 4.2 billion barrels worth of energy, and “21 docks at terminals from the Gulf Coast to main inland rivers in the Midwest that help serve its fleet of more than 250 barges.” If you want to scale, it’s hard to match this midstream giant. The fact that MPLX is owned by global oil company Marathon Petroleum Corp. (MRO), gives one a little more insurance regarding their investment.
Current yield: 7.7%
7. Targa Resource Corp. (TRGP)
The capitalization of $9 billion and its transportation assets make Targa one of the cornerstones of the domestic oil and natural gas business. They operate 28,500 miles of pipeline, over 40 processing plants and storage wells with a capacity at about 71 million barrels.
This year they seek to open the Grand Prix pipeline in New Mexico, locking in long-term contracts for prospective users of their facilities.
Current yield: 8.6%