Want to invest but worried about market volatility? How about buying into an energy company that pays a (well-covered) dividend yield of 9%? In this episode of "The High Energy Show" on Motley Fool Live, recorded on May 10, Motley Fool contributor Tyler Crowe discusses why pipeline company MPLX (MPLX -0.82%) could help stabilize your portfolio during these uncertain times.
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Tyler Crowe: The stock ticker is MPLX. It is a master limited partnership that is currently yielding 9%, and it's one that I've owned for several years. As scary as that 9% sounds, it is probably one of the better covered payments in the industry right now. They have what's called a distribution coverage ratio, which basically how much it's bringing in relative to how much it's paying out, is 1.7 times right now. The coverage is very good, so much so that they started paying a couple of special dividends. They paid a special dividend in the fourth quarter, and there's expectations of more to the rest of the year on top of buybacks. In this industry, we've had a lot of capital spending, but that's over. The infrastructure in the U.S. is built out for oil and gas and construction. With minimal spending right now, there is immense opportunity to return capital, and that's why I think MPLX is going to do incredibly well in a volatile market. Nine percent return? Even if the stock goes down, that's a pretty good total return at the end of the day.