When most people think of the energy sector, they think of oil derricks out in the ocean drilling for crude. But the reality is, there’s a vast ecosystem of firms in the sector – and one of the best could be the “barrels with no bottoms.” Midstream firms own and operate vast networks of pipelines and gathering, processing and storage facilities for a variety of fossil fuels. It turns out this is a great business to be in, and the latest pick in our Best High Dividend Stocks Model Portfolio is a prime example of that.
Our pick operates a huge system of pipelines covering crude oil and natural gas transmission. The key is that our pick is paid on the volume of product flowing through its lines, and not on the underlying commodity price. With long-term take-or-pay contracts, our firm’s cash flows remain steady. And since it’s structured as a master limited partnership (MLP), those cash flows head right back into investors’ pockets with a hefty 9.74% yield.
With plenty of growth opportunities via bolt-on transactions, our pick has plenty of ways to keep the energy and cash flowing.
You can check out the Best High Dividend Stocks Model Portfolio to explore all the stocks.
