When looking at the energy sector, boring is beautiful. Outside the world of wildcatters, gushing wells and even renewables, there’s a whole ecosystem of “boring” firms that store and transport natural gas and crude oil. The beauty is that this midstream world creates plenty of cash flows and dividends – including our latest pick in our High-Yield Model Portfolio.
Our pick is a giant among the midstream sector, and owns more than 22,000 miles’ worth of pipelines as well as numerous storage facilities, NGL processing capabilities, and terminal assets. Those assets ship energy products to and from key refining basins on the Gulf Coast and Middle America. Thanks to its fee-based business model, our pick produces ample cash flows from this huge portfolio of assets.
And since it’s structured as a master limited partnership (MLP), those cash flows head right back into investors’ pockets with a large 10%+ yield. Even better is that MLPs come with certain tax advantages for investors.
Because of our current pick’s strong cash flows and ample asset base, we’re removing a competing midstream firm from the model.
You can check out the Best High Dividend Stocks Model Portfolio to explore all the stocks.
