If you're looking for stocks that can provide you with decades of passive income, there is no better place to look than the energy midstream space. Pipeline master limited partners (MLPs) are pass-through entities set up to pay no corporate taxes in return for sending back much of their cash flow to stockholders in the form of distributions. While MLPs have some additional paperwork come tax time, their distributions have the added benefit of being mostly taxed-deferred until the stocks are sold.
Let's look at three great midstream stocks to buy that can give you passive income for the next decade.
Energy Transfer
NYSE: ET
Key Data Points
Energy Transfer (ET 1.01%) sports a 7.1% yield with plans to increase its distribution at a 3% to 5% pace moving forward. The company has one of the largest midstream footprints in the U.S., with much of its business coming from fee-based operations, helping create solid visibility.
After getting a bit over its skis with debt during the pandemic and having to slash its distribution, the company was able to quickly improve its balance sheet and return its distribution to prior levels -- and its distribution now sits well above the level before it cut it. Meanwhile, Energy Transfer is back in growth mode, as the company has a growing number of growth projects tied to natural gas demand, which is being boosted by AI data center consumption.
With a cheap stock valuation, well-covered distribution (nearly 1.8 times last quarter), and a strong growth pipeline, Energy Transfer is a stock you can buy and hold for strong passive income generation over the next decade and beyond.
Enterprise Products Partners
NYSE: EPD
Key Data Points
The king of consistency, Enterprise Products Partners (EPD 1.64%) has increased its distribution for 27 consecutive years. That's impressive given the number of energy market collapses and tough economic periods that have occurred over that stretch. It also speaks to the company's conservative and reliable nature, which remains there today.
The stock currently carries a 5.9% yield, and its distribution has been growing at around a 3% to 4% annual pace. It has one of the best balance sheets in the space, and had a robust 1.8 coverage ratio last quarter. Meanwhile, it will be flush with cash this year, as it reduced its capital expenditure (capex) budget for 2026, taking it to a range of $2.5 billion to $2.9 billion from $4.4 billion in 2025. Meanwhile, a bunch of growth projects are set to come online later this year, leading the company to predict double-digit adjusted EBITDA and cash flow in 2027.
Overall, Enterprise is a reliable high-yield stock you can count on that will see solid growth in the coming years.
Image source: Getty Images.
Western Midstream
NYSE: WES
Key Data Points
With an 8.6% yield, Western Midstream (WES +0.20%) has one of the highest yields in the midstream space. Meanwhile, it is looking to grow its distribution by 3% in 2026.
While Western Midstream had a strong 2025, it won't see as much growth this year, as the company is expecting to see some lower throughput through its systems, and it recently restructured an agreement with parent Occidental (OXY +5.22%) to move to a fixed-fee structure from a cost-of-service structure. Cost-of-service arrangements are typically used during early midstream buildouts to ensure the companies capture a necessary return on their investments.
In the new deal with Occidental, it will have minimum volume commitments through 2035, while Occidental will return 15.3 million units (shares) to Western, worth around $610 million, as compensation for the reduced operating cash flow of the new structure. However, Western management believes it will be able to reduce costs to such an extent that it will have little impact on its adjusted EBITDA.
Western also expanded its agreement with ConocoPhillips in the Delaware Basin, as it looks to further diversify away from Occidental. In addition, the company has been going all-in on the produced water business through its acquisition of Aris Water Solutions and Pathfinder Pipeline project. As such, the company is still set to grow its adjusted EBITDA this year, even during this transition period.
With one of the best balance sheets in the sector and the company setting the bar lower, now looks like a great time to add this high-yielder to your portfolio.
