4 Brilliant Midstream Stocks to Buy Now and Hold for the Long Term

Core Viewpoint - The energy sector is becoming more favorable due to changing government administrations, and many midstream stocks are currently trading at discounts to historical valuations, making them solid long-term investment opportunities. Group 1: Energy Transfer - Energy Transfer owns one of the largest integrated midstream systems in the U.S., allowing it to be a significant energy arbitrageur [2] - The company is well positioned in the Permian Basin, which is rich in cheap associated natural gas, providing opportunities for growth, particularly in AI-related power needs [3] - Energy Transfer has a forward yield of 7%, with distributions expected to grow by 3% to 5% annually, appealing to income-oriented investors [4] Group 2: MPLX - MPLX operates in logistics & storage and gathering & processing segments, handling about 10% of U.S. natural gas production, with strong positions in Appalachia and the Permian [5] - The company is increasing its growth capex from $889 million last year to$1.7 billion by 2025, driven by rising demand from exports and AI infrastructure [6] - MPLX has a forward yield of 7.1% and has consistently grown its yearly distribution by over 10% in the past three years [7] Group 3: Williams Companies - Williams Companies owns the Transco pipeline system, which connects Appalachia to the Gulf Coast and is positioned to benefit from coal-to-gas switching and increasing LNG demand [8][9] - The company has seven Transco expansion projects planned between 2025 and 2029, with a goal to grow EBITDA by 8% in 2025 and a CAGR of 5% to 7% moving forward [10] - Williams has a yield of 3.4% and a robust dividend coverage ratio of 2.3x, having grown its dividend by 6% last year [10] Group 4: Cheniere Energy - Cheniere Energy is well positioned to benefit from increasing LNG export demand, owning a significant stake in the largest LNG export facility in the U.S. [12] - The company is expanding its facilities, including adding three liquefaction trains at the Corpus Christi terminal, which will increase production capacity by 20% [15] - While Cheniere does not provide substantial dividends, it is a strong play for LNG export growth over the next 10 to 15 years [16]