Dividend investors have long gravitated to the midstream industry because of the high yields offered in the sector. Although there's been some upheaval in the space because of regulatory changes, growth hasn't stopped. The more oil and natural gas the U.S. pulls from the ground, the more pipelines, storage, and processing facilities will be needed. This is a multiyear trend that's still unfolding, and you can get paid really well to wait for that growth to materialize over time by buying midstream players like Enterprise Products Partners LP (NYSE:EPD), Magellan Midstream Partners LP (NYSE:MMP), and ONEOK Inc. (NYSE:OKE).

1. The industry bellwether

Enterprise is one of the biggest midstream partnerships in North America. It owns a largely fee-based portfolio that spans the continent and the full spectrum of the industry, including pipelines, processing facilities, storage, export terminals, and even a fleet of ships. It can easily take on projects and acquisitions that smaller rivals simply can't afford.

The word dividend written in yellow above a yellow line pointing up

Image source: Getty Images.

Despite that size, the partnership is finding plenty of ways to grow. It has roughly $6 billion in construction projects underway right now. The driving force is growing oil and natural gas production. Management is currently projecting dry natural gas production to increase by nearly 40% by 2025, 60% growth in oil and condensate production, and a just under 70% advance in natural gas liquids production.   

With a distribution yield of 6.3%, you'll get paid very well to stick around as this growth unfolds and Enterprise expands to serve it. Equally impressive as the future opportunity is the fact that the partnership has increased its distribution for 20 consecutive years. And with distribution coverage of 1.6 times in the third quarter, there's little reason to worry about Enterprise's ability to pay unitholders. A business shift toward self funding will lead to distribution growth in the low single digits over the near term, but it's an investor-friendly business decision, and distribution growth should boost back up to the mid-single digits soon enough.   

2. Smaller with faster distribution growth

Magellan is about a quarter of the size of Enterprise. While it can't take on the types of projects and acquisitions of its larger peer, it can take advantage of smaller opportunities that wouldn't move the needle at Enterprise. Right now it has $2.5 billion worth of growth projects in the works to expand its collection of fee-based assets.   

With a yield of around 6.2%, you can get paid very well to wait for that spending to unfold. But the story is likely to get even better for income-focused investors. Magellan has increased its distribution every quarter since going public in 2001, roughly 18 years at this point. Annualized growth over the past decade has been an incredible 10%. That said, the partnership is pulling back a little on distribution growth to ensure that distribution coverage remains above 1.2 times (that's lower than Enterprise, but still considered robust). The target is for distribution growth of as much as 8% a year over the next few years.   

MMP Financial Debt to EBITDA (TTM) Chart

MMP Financial Debt to EBITDA (TTM) data by YCharts

If that's not enough to entice you, one of Magellan's defining features is its conservative approach to leverage. Debt to EBITDA is around 2.6 times. That's at the low end of the industry, which is the norm for the partnership. If you don't like surprises, Magellan is a great way for income investors to benefit as the U.S. energy market expands.

3. A different way to do midstream

The first two midstream players here were limited partnerships, which don't play nicely with tax-advantaged retirement accounts. If you have cash in a Roth or a traditional IRA, you may want to consider ONEOK, which is structured as a regular corporation. The yield here is roughly 5.5% today.

The company is around half the size of Enterprise, but like its larger peer, it has around $6 billion in growth projects in the works today. It is projecting that spending to support dividend growth of as much as 11% a year through 2021. As for dividend safety, it is looking to maintain dividend coverage of 1.2 times over the span. The high dividend growth rate is a key reason for the lower yield. The dividend has been increased every year for 16 consecutive years.   

The interesting thing here is the improvements ONEOK has made to its balance sheet over the last year couple of years. At the end of 2016, its debt-to-EBITDA ratio was up to a worrisome 6.5 times. Today that number is back down to 3.7 times -- in line with Enterprise. More important, management lived up to the promise it made about reducing leverage. That's a nice thing to see and should provide extra confidence in its ability to live up to other goals, such as robust dividend growth.   

MMP Dividend Per Share (Quarterly) Chart

MMP Dividend Per Share (Quarterly) data by YCharts

ONEOK has the lowest yield of this trio of midstream players and the shortest dividend streak. But with the highest projected dividend growth rate and a vastly improved leverage profile, investors with cash in a tax-advantaged retirement account burning a hole in their pockets should take a close look.

Well worth the wait

Midstream companies have pretty boring businesses overall. They simply sit back and collect tolls as customers use their portfolios of vital energy assets. That allows them to pay large and growing distributions, ample compensation for investors who like to collect dividend checks. Better yet, expanding U.S. oil and gas production means there's plenty of room for these companies to keep growing.

Enterprise, Magellan, and ONEOK each have fairly conservative business profiles and solid plans to take advantage of the growth opportunities ahead of them ... and to reward investors along the way with dividend growth. If getting paid well to wait for these midstream businesses to expand over time sounds good to you, then you should take some time to research each of them today.

Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool recommends Enterprise Products Partners, Magellan Midstream Partners, and ONEOK. The Motley Fool has a disclosure policy.