Better Dividend Stock: MPLX vs. Energy Transfer

Core Viewpoint - Master limited partnerships (MLPs) are attractive income-generating investments due to their high dividend yields and stable cash flows, with Energy Transfer and MPLX being two prominent examples [1][11]. Group 1: MLP Overview - MLPs distribute a significant percentage of their cash flows to investors, typically offering higher dividend yields [1]. - Energy Transfer currently yields nearly 7%, while MPLX offers over 8%, both supported by stable cash flows and strong financial profiles [2]. Group 2: Financial Metrics - Energy Transfer has a distribution coverage ratio of 1.9x and a leverage ratio of 4.0-4.5x, while MPLX has a coverage ratio of 1.5x and a leverage ratio of 3.4x [4]. - MPLX's lower leverage ratio allows it to return more cash to investors, recently increasing its distribution by 12.5% for the third consecutive year [4]. - Energy Transfer is focused on strengthening its balance sheet and aims to achieve a leverage ratio in the lower half of its target range [5]. Group 3: Expansion Projects - MPLX has several expansion projects, including the Blackcomb and Rio Bravo natural gas pipelines, expected to come online through 2026, providing incremental cash flow [6]. - Energy Transfer is also pursuing expansion projects, such as the Nederland Flexport Expansion Project and the $2.7 billion Hugh Brinson Pipeline, which will enhance its cash flow [8][9]. - Energy Transfer has been active in acquisitions, including the recent$3.1 billion acquisition of WTG Midstream, which is expected to boost cash flow through 2027 [10]. Group 4: Investment Appeal - Both Energy Transfer and MPLX are strong options for generating passive income, with MPLX currently offering a higher yield and faster payout growth compared to Energy Transfer [11][12].