These Energy Dividend Stocks Print Money

Core Viewpoint - Energy midstream companies like Energy Transfer, Kinder Morgan, and Williams are generating stable cash flows and are ideal for investors seeking passive income due to their minimal direct exposure to commodity price volatility [1][13]. Group 1: Energy Transfer - Energy Transfer operates a vast network of over 130,000 miles of pipelines, moving oil, natural gas, and other commodities, with 90% of its earnings supported by fee-based contracts and government-regulated rate structures [3][4]. - In the first quarter, Energy Transfer generated over $2.3 billion in distributable cash flow and distributed approximately $1.1 billion to investors, while investing $945 million in growth capital spending [4][5]. - The company plans to invest $5 billion in growth projects this year, expected to enhance stable cash flows significantly by 2026 and 2027, with an aim to increase its more than 7% yielding payout by 3% to 5% annually [5]. Group 2: Kinder Morgan - Kinder Morgan possesses a significant energy infrastructure portfolio, operating one of the largest natural gas pipeline networks in the U.S., with 64% of its cash flow backed by take-or-pay contracts [6][7]. - The company generated $1.2 billion in cash flow from operations in the first quarter, covering its dividend outlay of $642 million by roughly 2 times, allowing for excess free cash flow to fund expansion projects [8]. - Currently, Kinder Morgan has $8.8 billion worth of expansion projects under construction, expected to enhance stable cash flow sources and support continued dividend increases [8]. Group 3: Williams - Williams operates one of the largest natural gas infrastructure platforms in the U.S., with key interstate pipelines and gathering and processing operations [9]. - The company generated nearly $1.5 billion in available funds from operations in the first quarter, covering its more than 3% yielding dividend by 2.4 times, allowing for significant cash retention for expansion projects [11]. - Williams is engaged in multiple growth projects, including expanding its Transco pipeline and building a natural gas power plant to meet rising demand, which will drive cash-flow growth through 2030 [12].