Midstream Distribution Growth: Plains & Enterprise Lead New Wave of Increases

Core Insights - Recent announcements from midstream companies indicate a strong commitment to shareholder returns, with distribution growth serving as a key indicator of sector health and stability in income generation despite market volatility [1]. Distribution Increases - Plains All American (PAA/PAGP) announced a quarterly distribution increase to $0.4175 per unit, reflecting a 9.9% rise from the previous level [2]. - Enterprise Products Partners (EPD) declared a quarterly distribution of $0.55 per unit, a 0.9% increase from $0.545, continuing its long-standing trend of payout growth [3]. Sector Outlook - Sunoco (SUN) has set a 2026 guidance targeting at least 5% distribution growth, with plans for quarterly increases, while Energy Transfer (ET) aims for an annual growth rate of 3% to 5% [5]. - The midstream sector's ability to generate excess free cash flow and preference for returning value to unitholders is underscored by these updates [4]. ETF Exposure - Distribution hikes from midstream companies positively impact key ETFs such as the Alerian MLP ETF (AMLP) and the Alerian Energy Infrastructure ETF (ENFR), which provide investors with exposure to the sector [6]. - As of January 8, the Alerian MLP Infrastructure Index (AMZI) and Alerian Midstream Energy Select Index (AMEI) yielded 7.7% and 5.6%, respectively, highlighting the attractiveness of midstream investments for income generation in 2026 [7].