1 High-Yield Midstream Stock to Buy With $10,000 and Hold Forever

Core Viewpoint - The midstream energy sector offers high yields, but investors should be cautious and selective due to varying levels of risk among different businesses [1][2]. Group 1: Investment Risks - High yields in the midstream sector are generally aimed at producing income for shareholders, but not all high yields are equally reliable [2]. - USA Compression Partners has a high yield of 8.3%, but operates with a debt-to-EBITDA ratio of 4.4x, which is higher than Energy Transfer's 3.7x and Enterprise Products Partners' 3.2x [4]. - Energy Transfer has a yield of 7.3% but cut its dividend during the pandemic, raising concerns about its income reliability [6]. Group 2: Reliable Investment Option - Enterprise Products Partners is highlighted as a more reliable investment, with a lower yield of 6.8% but a strong operational history [6][7]. - Enterprise has increased its distribution for 26 consecutive years, including during economic downturns, indicating a commitment to reliable income [8]. - The company has a strong balance sheet with an investment-grade rating and a distributable cash flow that covers its distribution by 1.7x, providing a buffer against potential cuts [9]. Group 3: Management Alignment and Long-term Outlook - Insiders own nearly one-third of Enterprise's units, aligning management interests with unit holders [10]. - The company is financially conservative and aims to provide a steady and growing income stream, making it a strong candidate for long-term investment [10][11]. - A $10,000 investment in Enterprise is considered an attractive long-term proposition for income-focused investors [11].