Pipeline stocks are publicly traded companies that own and operate midstream energy infrastructure. The U.S. has about 3 million miles of pipelines that transport natural gas and liquid fuels to power plants, refineries, businesses, and homes, making them essential to the country’s energy supply.
A mix of oil and gas producers, utilities, and dedicated midstream companies owns most pipelines. Midstream operators typically generate stable fee-based revenue by providing transportation capacity to producers, refiners, and utilities. Some of these pipeline-focused companies are master limited partnerships (MLPs), which offer potential tax advantages but also pose complications.
Although pipeline companies have faced headwinds from price volatility and environmental concerns that have slowed their expansion in the past, rising energy demand is driving renewed interest in new pipeline capacity.
7 top pipeline stocks for 2026:
| Name and ticker | Market cap | Dividend yield |
|---|---|---|
| Enbridge (NYSE:ENB) | $118.1 billion | 5.05% |
| Enterprise Products Partners (NYSE:EPD) | $81.2 billion | 5.79% |
| Energy Transfer (NYSE:ET) | $65.1 billion | 7.00% |
| Kinder Morgan (NYSE:KMI) | $73.4 billion | 3.55% |
| MPLX (NYSE:MPLX) | $56.7 billion | 7.27% |
| Oneok (NYSE:OKE) | $55.6 billion | 4.71% |
| Williams Companies (NYSE:WMB) | $88.0 billion | 2.81% |
1. Enbridge
NYSE: ENB
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2. Enterprise Products Partners
NYSE: EPD
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NYSE: MPLX
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NYSE: KMI
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NYSE: WMB
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6. Energy Transfer
NYSE: ET
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NYSE: OKE
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Benefits and risks of investing in Pipeline stocks
Investing in pipeline stocks has its share of benefits and drawbacks. Some pros of investing in pipeline stocks include:
- Income: Most pipeline companies generate stable income backed by long-term fixed-rate contracts or government-regulated rate structures. That enables them to pay high-yielding dividends to their investors.
- Low volatility: Pipeline companies tend to be less volatile than the average stock.
- Potential tax advantages: Pipeline companies structured as MLPs can defer taxes on some of the distribution income they receive.
Meanwhile, some cons of pipeline investments are:
- Slower growth: Most pipeline companies tend to grow their earnings at a low-to-mid single-digit annual rate.
- Potential tax complications: MLPs send a Schedule K-1 federal tax form, which can delay and complicate your annual tax filing.
- Lower price appreciation potential: Given their higher yields and slower growth rates, pipeline companies tend to offer less price appreciation potential.
Should you invest in pipeline stocks?
Forecasters expect U.S. natural gas demand to rise between 19 bcfd and 26 bcfd by 2030 from 2025's level of 115 bcfd. The main drivers are LNG and power demand, with the latter partly driven by AI data centers. This expected surge in gas demand will fuel the need for investment in new infrastructure, including pipelines. This catalyst should enable pipeline companies to grow their earnings and dividends in the coming years. That makes them compelling investment opportunities, especially for those seeking income.
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Pipeline stocks FAQ
About the Author
Matt DiLallo has positions in Enbridge, Energy Transfer, Enterprise Products Partners, and Kinder Morgan. The Motley Fool has positions in and recommends Enbridge and Kinder Morgan. The Motley Fool recommends Enterprise Products Partners and Oneok. The Motley Fool has a disclosure policy.
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