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Treasury yields are near multi-decade highs. The S&P 500 (SNPINDEX: ^GSPC) Shiller CAPE ratio is close to the second-highest level ever. Inflation is resurging. The case for owning high-yield energy stocks has rarely been more compelling.
That's especially true for pipeline stocks. The midstream sector continues to trade at historically attractive valuations, even after delivering a strong year-to-date performance. Here are three high-yield energy stocks in the midstream sector to load up on in October.
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Enterprise Products Partners LP (NYSE: EPD) just might be the top midstream stock for income investors. No other midstream company boasts a stronger balance sheet. Enterprise's management team is arguably the best in the industry.
Sure, you can find higher yields. However, Enterprise Products Partners' forward distribution yield of 6.3% remains attractive. More importantly, the distribution is reliable, with Enterprise's distribution coverage ratio of 1.9x.
It also helps that Enterprise Products Partners has increased its distribution for 28 consecutive years. This record puts the limited partnership in an elite group of midstream Dividend Champions.
Like other midstream operators, Enterprise benefits from multiple tailwinds. In particular, artificial intelligence (AI) data centers are driving tremendous demand for natural gas. The LP's pipelines and Permian Basin gas processing facilities, along with its liquid natural gas (LNG) export terminals, will enable it to capitalize on these AI opportunities.
Energy Transfer LP (TXSE: ET) edges Enterprise Products Partners on a couple of fronts. First, its yield of 6.8% is higher. Second, the company's distributable cash flow (DCF) coverage ratio of 2.28x in the first half of 2026 was also higher.
Want more good news? Energy Transfer plans to increase its distribution by 3% to 5% per year over the long term. The LP recently bumped up its distribution payout by more than 3%, its 19th consecutive quarterly distribution increase.
Energy Transfer's business is more diversified than most of its peers. The company transports crude oil, natural gas, and natural gas liquids (NGLs), and has other operations. None of its business segments generates more than 30% of total adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA).
The LP has an obvious growth catalyst. Its 442-mile Hugh Brinson Pipeline is now operational, transporting natural gas from West Texas processing facilities to existing pipelines south of the Dallas-Fort Worth area. Phase 2, which includes additional downstream compression, should go into service in the first quarter of 2027.
For investors who want to turbocharge their income, check out MPLX LP (NYSE: MPLX). This midstream energy leader pays a forward distribution yield of roughly 7.5%.
Granted, MPLX's distribution coverage ratio of 1.3x is lower than those of Enterprise Products Partners and Energy Transfer. However, that's still more than enough to keep the distributions flowing. And they're growing, too: MPLX increased its distribution by 12.5% in 2024 and 2025. It's targeting similar increases in 2026 and 2027.
Like its peers, MPLX continues to reap the rewards from the AI data center boom that's driving natural gas demand. Unsurprisingly, the company is allocating over 90% of its growth capital this year to investments in its natural gas and NGL segments.
Several of those investments are already beginning to pay off or will do so soon. MPLX's Harmon Creek III processing plant began operations in August 2026. In the fourth quarter of this year, the company should complete its Belvieu Alternative Natural Gas Liquids (BANGL) pipeline and Delaware sour gas treating facility expansions.
A $10,000 investment each in Enterprise Products Partners, Energy Transfer, and MPLX would generate annual income of around $2,068. Even better, all three midstream energy companies are likely to increase their distributions going forward.
None of these pipeline stocks need oil prices to remain elevated to continue paying income investors. They don't need the Federal Reserve to keep rates unchanged, either. All they require is for the natural gas and other fuels to keep flowing through their pipelines. That should be a safe bet.
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Keith Speights has positions in Energy Transfer and Enterprise Products Partners. The Motley Fool recommends Enterprise Products Partners. The Motley Fool has a disclosure policy.
3 High-Yield Energy Stocks to Load Up on This October (1 Yields Over 7.5%) was originally published by The Motley Fool
