The top firms in the midstream sector can best be described as ‘toll-roads.’ They provide a conduit for energy commodities to travel on and they collect a fee for providing this service. It is as simple as that. Because of its toll-road moniker, our latest Best Energy Dividend Stocks List pick is a cash flow machine, providing investors with a 10% yield that has grown steadily over the last 5+ years!
Our pick’s secret sauce stems from its key partnership with its sponsor. A huge base of our pick’s revenues and cash flows comes from feeding its sponsor’s facilities and refineries. This constant demand and need provides a massive base of cash flows for our pick.
But our selection hasn’t rested on its laurels. It used its excess cash flow to invest in other toll-roads and other price-sensitive assets. This has it being one of the largest natural gas pipeline operators in a key region of the country.
As such, our pick has been able to use the combination of cash flows to provide high returns for its investors. Better still, our pick is structured as a master limited partnership (MLP) whose cash flows pass-through to investors’ pockets as a large tax-advantaged yield. In the end, our pick makes an ideal selection in the energy sector.
You can check out the Best Energy Dividend Stocks List to explore all the stocks.
