Yahoo Finance·2026-01-05 23:47Core Viewpoint - The midstream master limited partnership (MLP) sector offers attractive income opportunities for investors, particularly through pipeline companies that have stable business models less affected by commodity price fluctuations [1]. Group 1: Western Midstream - Western Midstream Partners has a high yield of 9.2%, supported by a strong balance sheet and well-covered distributions [3]. - The company ended the last quarter with a leverage ratio of 2.8 times and holds an investment-grade credit rating, indicating financial stability [4]. - Western generates strong free cash flow exceeding its distribution, with significant business coming from its parent company, Occidental Petroleum [4]. - The acquisition of Aris Water Solutions will diversify Western's customer base, enhancing its growth potential [4]. - The company is focusing on produced water disposal in the Delaware Basin, with the Pathfinder Pipeline project being a key growth initiative [5]. - Western's enterprise value-to-EBITDA multiple is just over 8 times based on 2026 estimates, making it an attractive option for income-oriented investors [6]. Group 2: MPLX - MPLX offers an 8.1% yield and maintains a strong balance sheet, with a leverage ratio of 3.7 times and a distribution coverage level of 1.3 times based on its distributable cash flow [7][9]. - The company has repositioned its portfolio for growth through a series of acquisitions and divestitures, enhancing its attractiveness in the midstream sector [8].