3 Brilliant Pipeline Stocks to Buy Now and Hold for the Long Term

Core Insights - Midstream master limited partnerships (MLPs) provide reliable income and steady growth, playing a crucial role in the energy value chain by earning stable fees from the transportation, processing, and storage of oil and natural gas [1] Company Summaries - Energy Transfer: - The company has improved its balance sheet and distribution coverage, entering a growth phase with plans to invest approximately $5 billion in growth capital expenditures this year, an increase from $3 billion last year [2] - Major projects are focused in the Permian Basin, including the Hugh Brinson pipeline to meet rising Texas power demand and the Desert Southwest pipeline for gas transport to Arizona and New Mexico [3] - The Lake Charles LNG export terminal project is nearing a final decision, with global LNG demand expected to rise significantly over the next decade, potentially securing long-term fee-based revenues [4] - Financially, Energy Transfer is in a strong position with low leverage and about 90% of this year's EBITDA supported by fee-based contracts, offering a nearly 8% yield well-covered by distributable cash flow, with expected annual distribution increases of 3% to 5% [5] - The stock has underperformed this year, presenting a buying opportunity for investors [6] - Western Midstream Partners: - This company offers an attractive mix of high yield, strong balance sheet, and steady growth, supported by Occidental Petroleum, which owns over 40% of the partnership [9] - Its contracts are primarily cost-of-service or include minimum volume commitments, ensuring reliable revenue regardless of commodity price fluctuations, with a conservative leverage ratio of around 2.9 [9] - Genesis Energy: - The company is positioned as a potential turnaround story, appealing to investors looking for growth opportunities [8]