Pipleine stocks are publicly traded companies focused on owning energy midstream infrastructure such as pipelines. There are about 3 million miles of pipelines in the U.S. They safely deliver trillions of cubic feet of natural gas to power plants, industrial facilities, homes, and businesses. Billions more gallons of liquid fuels are delivered to refineries, terminals, and refueling stations. Pipelines are crucial to maintaining the economy's energy supply.
Many types of companies own energy pipelines. Oil and gas producers own pipelines to transport production from wells to refineries and market centers. Utilities will also own pipelines to transport natural gas to their power plants and distribute it to consumers.
Meanwhile, many midstream companies focus entirely on owning and operating pipelines and other energy-related infrastructure to support producers, utilities, and refiners. They are typically paid a fixed fee to allow other energy companies to utilize the capacity of their pipeline systems.
One unique aspect of the pipeline sector is that some companies have chosen to structure themselves as master limited partnerships (MLPs) for tax purposes. These entities tend to distribute a large portion of their cash flows to investors, making them more appealing to income investors.
The U.S. pipeline industry's expansion has been under pressure in recent years due to volatile energy prices and environmental concerns. However, with energy demand surging, it's fueling demand for new pipeline capacity in the U.S.
Seven best pipeline stocks
More than 25 publicly traded midstream companies operate pipelines and related energy infrastructure. That gives investors lots of options. Here's a snapshot of some of the top pipeline stocks:
Market cap (short for capitalization) refers to a company's total value. To calculate market cap, simply multiply the share price by the number of shares. It's one way to evaluate how much a company is worth.
1. Enbridge
Enbridge operates the world's longest, most complex crude oil and liquids transportation system, moving 30% of all the oil produced in North America. The Canadian corporation also operates natural gas transmission and distribution pipelines, carrying about 20% of all the gas consumed in the U.S. The company also has a growing renewable energy business, highlighted by offshore wind energy facilities in Europe.
NYSE: ENB
Key Data Points
2. Enterprise Products Partners
NYSE: EPD
Key Data Points
NYSE: MPLX
Key Data Points
MPLX (MPLX +0.38%) is an MLP formed by refining giant Marathon Petroleum (MPC -0.37%). It operates crude oil and refined product logistics assets, as well as natural gas and NGL services. Its midstream operations generate significant cash, most of which it distributes to shareholders, retaining some to help fund its continued expansion.
The MLP has increased its distribution payment every year since its formation in 2012. MPLX should have no trouble continuing to grow its payout in the future. It has a large slate of expansion projects under construction, including two NGL fractionators for Marathon that it expects to complete in 2028 and 2029.
4. Kinder Morgan
NYSE: KMI
Key Data Points
Kinder Morgan (KMI +0.42%) is one of the biggest natural gas pipeline companies in the U.S. The pipeline corporation operates the largest natural gas transmission network, comprising 66,000 miles of pipelines that transport approximately 40% of the country's gas volume.
Kinder Morgan is also the largest independent terminal operator and transporter of refined petroleum products in North America, as well as the leader in transporting carbon dioxide.
The company benefits from surging demand for natural gas. It has secured about $9.3 billion in natural gas pipeline and other expansion projects it expects to complete by mid-2030. Those projects will grow Kinder Morgan's cash flow, giving it more fuel to pay dividends. It delivered its eighth straight annual dividend increase in 2025.
5. Williams Companies
NYSE: WMB
Key Data Points
Williams Companies (WMB +0.61%) is also a large-scale natural gas pipeline company. The pipeline corporation owns and operates more than 33,000 miles of pipelines that handle about one-third of all the gas used in the U.S. each day.
Williams has a large pipeline of natural gas expansion projects that are expected to fuel growth in the coming years. These projects will move more gas to power-generation facilities, liquefied natural gas (LNG) export terminals, and industrial facilities.
It's also building several natural gas-fired power plants to support growing electricity demand. These projects should grow Williams' earnings by 5% to 7% annually, providing the company with the fuel to continue increasing its dividend payment.
6. Energy Transfer
NYSE: ET
Key Data Points
Pipeline stocks can be great income investments
Pipeline companies tend to generate very steady cash flow. They earn fees as oil and gas flow through their systems, which gives them the funds to pay attractive dividends and invest in expanding their operations. Pipeline stocks tend to be great options for investors seeking to generate some passive income.
FAQ
About the Author
