Dividend stocks aren't known for their ability to grow, especially those that offer a higher dividend yield. That's what makes Energy Transfer's (ET 1.43%) second-quarter results so surprising. The high-yielding master limited partnership (MLP) grew its earnings by over 23%, while its cash flow rocketed upward by 35%.

Those surging earnings have given Energy Transfer the fuel to significantly boost its already high-yielding distribution. That payout is up 50% this year and now yields more than 8%. Here's a look at what's fueling its surprisingly rapid growth.

Drilling down into Energy Transfer's earnings surge

Energy Transfer operates one of the most diversified midstream businesses in the energy sector. Most of these businesses performed well in the second quarter, contributing to its surging growth:

Energy Transfer's second-quarter adjusted EBITDA by segment in 2021 and 2022.

Data source: Energy Transfer. Chart by author.

As the chart above shows, the primary growth driver in the quarter was the midstream gathering and processing segment, where earnings nearly doubled. The catalyst was the company's acquisition of Enable Midstream last December. Enable Midstream added an incremental $369 million of earnings in the period. In addition, Energy Transfer got a $137 million boost from favorable natural gas and natural gas liquids (NGLs) prices in the quarter. Those higher earnings helped more than offset increased expenses.

The other two notable growth drivers in the quarter were the company's interstate transportation and storage business and its crude oil business. Intrastate gas pipeline earnings were up almost 20%, mainly fueled by the addition of Enable Midstream. The company also benefited from higher volumes and rates on some of its pipelines.

Meanwhile, crude oil earnings were up over 15%. The primary driver here was higher volumes on its recently expanded Bakken pipeline. Crude-oil segment earnings also got a bit of a boost from acquiring Enable's oil-related assets. Another growth driver was strong volumes in the Gulf Coast region, thanks to releases from the Strategic Petroleum Reserve to help relieve the upward pressure on oil and gas prices.

Can Energy Transfer continue its brisk growth?

Energy Transfer's strong second-quarter results, along with continued robust conditions in the energy market, have the MLP foreseeing better-than-expected earnings this year. The company now sees its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) coming in between $12.6 billion and $12.8 billion. That's above its previous guidance range of $12.2 billion to $12.6 billion.

That upward momentum should continue. While the company hasn't made a needle-moving deal like Enable Midstream this year, it has continued making acquisitions. In the first quarter, the MLP acquired some underground storage assets and an ethylene header system to enhance two of its hubs. Meanwhile, in the second quarter, it agreed to buy Woodford Express for $485 million. The deal will immediately boost its cash flow and enhance its midstream operations by complementing those acquired with Enable Midstream.

Energy Transfer is also investing between $1.8 billion and $2.1 billion this year to expand its existing operations. It recently restarted the construction of a previously paused NGL plant and is building two more natural gas processing plants to support increased volumes driven by higher oil and gas prices.

Meanwhile, the company is working on securing larger-scale expansion opportunities, including a liquefied natural gas (LNG) export facility, a petrochemical plant, and an NGL pipeline in Panama. It has made significant progress on the LNG plant, securing five large contracts to sell LNG starting in 2026, when the plant should be operational. Energy Transfer hopes to approve this project later this year, assuming it can secure additional contracts and a financing partner.

These expansion projects could fuel growth for several years. In addition, Energy Transfer is a serial acquirer and is always looking for its next deal. With its financial profile improving, it wouldn't be surprising to see the company make another needle-moving acquisition before 2022 ends.

More growth is ahead for this dividend stock

Energy Transfer's acquisition of Enable Midstream is paying big dividends these days, fueling eye-popping growth for the high-yielding MLP. The company could continue growing at a healthy rate in the coming years. It has already made a couple of small deals, and has a growing pipeline of expansion projects underway and in development. Meanwhile, it's always open to making needle-moving deals. These factors make it seem likely that Energy Transfer will continue to grow its big-time payout in the future.