The ultimate test of safety and reliability for a high-yielding dividend stock is the company's financial health. If the yield is backed by rising cash flows and dividends and the company has the potential to keep growing, it is the kind of dividend stock that can not only fetch you regular income, but also generate solid returns over time. That's what investors in MPLX (MPLX +1.68%) have enjoyed so far.
MPLX is paying its investors a monster yield of 7.9%. That's one of the highest yields among large-cap stocks within the energy sector. MPLX has also rewarded shareholders with significant dividend increases, which have made a substantial difference to the returns that investors have earned from the stock over the years.
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MPLX has been a multibagger stock, thanks to dividends
MPLX is a midstream energy infrastructure company. While there are several large pipeline companies in the U.S., MPLX has a unique competitive advantage.
Marathon Petroleum (MPC +0.38%), the refining giant that formed MPLX in 2012, is MPLX's largest shareholder and accounted for 49% of its revenue in 2024. The two companies have several long-term, fee-based contracts with minimum volume commitments. That provides a large and predictable revenue base for MPLX, as well as access to Marathon Petroleum's massive asset base and growth opportunities.
Because MPLX also pays dividends to Marathon Petroleum, the latter has an incentive to support the company's growth. To put a number to that, MPLX will pay Marathon $2.8 billion in annualized dividends this year.
As a master limited partnership (MLP), MPLX distributes a significant portion of its cash flows to investors in the form of dividends (or distribution, in MLP parlance). It has also increased its dividend payout for several years, including a recent 12.5% hike for 2025.
If you'd bought MPLX stock five years ago and reinvested dividends all along, you'd have nearly quadrupled your investment by now.
Why you can bank on MPLX's big dividend yield
Investors can continue to expect MPLX stock to pay bigger dividends and a monster yield. The company is on solid footing. It recently acquired a sour gas-treating business in the Delaware Basin, Northwest Midstream, for $2.4 billion, as well as the remaining 55% interest in the BANGL pipeline for $715 million. The pipeline connects the Permian Basin to the Gulf Coast.
These are smart growth moves, as they position MPLX to capitalize on the data center boom in Texas. Data centers have voracious power needs to keep their servers and cooling systems running around the clock, and that's fueling demand for natural gas. In fact, MPLX just signed a letter of intent with MARA Holdings to supply natural gas from the Delaware Basin to power up MARA's electricity plants and data centers in West Texas.
Meanwhile, MPLX is also divesting noncore Rockies gathering and processing assets to raise $1 billion.
Overall, 2025 was a significant year for MPLX, as it invested $3.5 billion in acquisitions to expand its cash flow base beyond Marathon contracts. These projects should drive MPLX's cash flows higher and support dividend raises and monster yields year after year.
If you're planning to buy the dividend stock, just keep the taxation aspect in mind -- MLPs send Schedule K-1 federal tax forms every year.
