U.S. natural gas power generation is set to increase, lending to growth opportunities for midstream companies. Developers plan to add 18.7 gigawatts (GW) of combined-cycle capacity to the grid by 2028, with 4.3 GW already under construction, according to the U.S. Energy Information Administration.
Wildfires burning in Canada's oil-producing region are prompting investors to examine the potential impact to midstream companies. There were over 24 out of control wildfires in Alberta as of Wednesday.
There are several reasons why midstream companies have earned a long-term allocation in portfolios. Those include income, real asset exposure, and diversification benefits.
First-quarter earnings have underscored that natural gas remains a compelling opportunity for the midstream segment. As earnings are well underway, many midstream names have provided updates on natural gas growth opportunities, including those driven by AI and data centers.
First-quarter earnings are well underway for midstream companies with some notable developments for investors. Several midstream names have reaffirmed full-year 2025 financial guidance.
Natural gas could be a bright spot for the midstream segment as oil sells off. Crude oil prices have seen significant volatility recently, influenced by tariffs and escalating trade tensions between the U.S. and China.
The lowest-cost ETF in the energy infrastructure category has reached a significant trading milestone. The Alerian Energy Infrastructure ETF (ENFR) surpassed $300 million in assets under management as of March 17.
To understand midstream's defensiveness during periods of volatile commodity prices, it's important to examine the fee-based business models. Midstream has remained defensive and has held up better than broader energy amid weakening oil prices in recent weeks.
I initiated a position in The Alerian Energy Infrastructure ETF (ENFR) for exposure to North American midstream energy companies, rating it a buy. ENFR offers a diversified portfolio with a 4.45% dividend yield, mitigating risks associated with individual MLPs and C-corps. ENFR simplifies tax reporting with 1099 forms, making it suitable for tax-advantaged accounts like 401k and IRAs.
More midstream names have provided updates on natural gas growth opportunities driven by AI and data centers. Pembina Pipeline Corporation (PPL CN) and Williams Companies (WMB) are the latest midstream players to announce deals to supply natural gas to data centers.
Energy Transfer LP (ET) has entered into a long-term agreement to supply natural gas to a Texas data center. This is a notable update, as midstream companies look to capitalize on natural gas growth opportunities.
Several midstream companies have already announced increases to fourth-quarter dividends as earnings are underway. The midstream segment is known for offering generous income, which is a primary reason many advisors use energy infrastructure ETFs in portfolios.