Units of MLP Crestwood Equity Partners (NYSE:CEQP) have been scorching hot this year, surging more than 20% through early August. The midstream company, however, has cooled off a bit in recent weeks due to the sell-off in the broader market. Overall, it's now roughly 9% below its high for the year.

That recent sell-off likely makes yield-seeking investors wonder if now's a good time to consider buying Crestwood, especially since it has helped push the company's yield up to more than 7%. Here's a quick look at the bull and bear case for the high-yielding MLP.

Pipelines over water at sunset.

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The bull case for Crestwood Equity Partners

Crestwood Equity Partners recently reported its second-quarter results, which show that its three-year growth program is paying dividends. The company's earnings and cash flow soared 18% and 19%, respectively. One of the drivers was the recent buyout of a joint venture partner, which gave Crestwood full control over a fast-growing gathering and processing business in the Powder River Basin. That needle-moving acquisition, when combined with its other expansion-related initiatives, has it on track to grow cash flow per unit at a more-than-20% compound annual rate through 2020. That's by far the fastest pace in its peer group. 

Crestwood's high-octane growth has it on track to produce enough cash to cover its current distribution rate by a peer-group-leading 2.0 times next year. Meanwhile, its earnings growth should push its leverage ratio down to the second-lowest level among its rivals in 2020.

Those top-tier financials will provide Crestwood with significant flexibility in the next year as it winds down its current expansion phase. The MLP could use its growing free cash flow to boost its distribution, invest in new expansion projects, or launch a unit repurchase program.

The bear case for Crestwood Equity Partners

While Crestwood has plenty of growth lined up to keep it well fueled through next year, it's unclear what will drive the company after that. It currently has only about $100 million to $150 million of expansion-related spending lined up for 2020. That's a significant drop off for a company that will invest between $425 million and $475 million on growth projects this year. The MLP does have several expansion opportunities in development, including building a new gas processing plant in the Delaware Basin and potential expansions of its Stagecoach pipeline joint venture with Consolidated Edison (NYSE:ED). However, it needs to start securing new projects to enhance the visibility of its growth prospects beyond next year.

Another concern with Crestwood is its focus on the more volatile gathering and processing segment of the midstream market. While the company signs long-term, fixed-fee contracts with customers to gather and process oil, natural gas, and water, these activities are more sensitive to commodity price volatility. That's because when oil prices drop, drillers tend to reduce their activity levels, which results in fewer volumes flowing through Crestwood's systems. As such, if crude prices slumped below $50 a barrel for an extended period, Crestwood likely wouldn't grow as fast as it currently expects.

Given those issues, an ideal outcome would be if Crestwood and Consolidated Edison secured a project to expand their Stagecoach system in the future. Doing so would improve Crestwood's post-2020 growth prospects while also reducing its exposure to the more volatile gathering and processing segment.

Verdict: Crestwood Equity Partners looks like an excellent buy for income-seekers

While there is some uncertainty about what will drive Crestwood's growth after next year, it has plenty of time, lots of opportunities, and increasing financial flexibility. Because of that, Crestwood looks like a great buy, given that its growth engine is just getting revved up. Add that upside to its high yield, and this MLP could continue generating market-beating returns over the next few years.