For investors looking for income, one of the best places to look is the midstream master limited partnership (MLP) space. These pipeline companies act largely as energy toll roads, and as such, they have predictable business models that tend not to be directly impacted by fluctuations in commodity prices.
Let's look at two high-yield pipeline stocks to buy now and hold for the long term.
Image source: Getty Images.
1. Western Midstream (9.2% yield)
With a 9.2% yield, Western Midstream Partners (WES +0.20%) has one of the highest yields in the MLP space. However, don't let that scare you off. Its distribution is actually well covered, and it has one of the strongest balance sheets in the midstream sector.
Western ended last quarter with leverage of just 2.8 times, which is very low for pipeline companies, and an investment-grade credit rating. Meanwhile, it produces strong free cash flow that is in excess of its distribution.
Much of the company's business comes from parent and largest shareholder Occidental Petroleum, but with its acquisition of Aris Water Solutions, it will have a more diversified customer base moving forward.
NYSE: WES
Key Data Points
Western Midstream is going all in on produced water disposal in the Delaware Basin, as in addition to the Aris deal, its biggest growth project is the Pathfinder Pipeline, which will transport disposed water from its North Loving processing plant, which it is also expanding. The company estimates that the Delaware Basin will need to see more than 18 million barrels a day of produced water to see drilling operations run smoothly. With Aris, the company will now have a complete full-cycle water management business that can not only dispose of produced water, but also recycle it.
Western's push into the produced water disposal business should help drive growth in the coming years. Meanwhile, the stock is inexpensive, trading at an enterprise value (EV)-to-EBITDA (earnings before interest, taxes, depreciation, and amortization) multiple of just over 8 times based on 2026 EBITDA estimates. With the company looking to grow its distribution at a mid-to-low-single-digit range moving forward, this is a great stock for income-oriented investors.
2. MPLX (8.1% yield)
MPLX (MPLX 0.75%) is another attractive midstream stock with a high yield that has a strong balance sheet. It ended Q3 with leverage of 3.7 times, while it has a 1.3 times distribution coverage level based on its distributable cash flow (operating cash flow minus maintenance capex).
One of the most impressive things about MPLX is how quickly the company has grown its distribution over the past several years. It has increased its distribution by more than 10% in each of the last four years, including 12.5% hikes in both 2024 and 2025. The company thinks this type of distribution growth is sustainable over the next couple of years, given its project pipeline.
NYSE: MPLX
Key Data Points
MPLX is growing through both acquisitions and growth projects. It recently bought the remaining 55% interest in the BANGL pipeline it did not already own, and is in the process of expanding it. Meanwhile, it also acquired a sour gas treatment business in the Delaware basin for $2.4 billion, while selling its gathering and processing assets in the Rockies for $1 billion. It will spend another $500 million to complete the construction of another sour gas treatment plant at the Titan complex, while it just completed its Secretariat processing plant. These projects set the company up to see solid growth in the coming years.
Trading at an EV/EBITDA multiple of just under 10 times, MPLX's stock is not the cheapest MLP, but it has a high yield and some of the best distribution growth in the space, making it a solid buy at current levels for income-oriented investors.
