MPLX (MPLX 3.20%) is a high-octane income investment. The master limited partnership (MLP) pays a prodigious cash distribution that currently yields 7.3%.
Midstream company MPLX said on Friday it would buy the remaining 55% interest in the BANGL natural gas pipeline from affiliates of WhiteWater and Diamondback Energy for $715 million.
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Since Income Investor last covered MPLX stock on Oct. 16, shares have risen another 23%. These returns are on top of its attractive dividend.
The company recently delivered another stellar quarter, with the adjusted EBITDA and distributable cash flow demonstrating robust growth. From the broader perspective, MPLX is a well-rounded business with multiple fundamental strengths supported by favorable industry trends. The stock offers a generous 7%+ distribution yield, and my DDM valuation analysis suggests that there is massive upside potential.
Most high-yielding dividend stocks tend to be slower-growing companies. Because of that, the income stream makes up the bulk of the return you'll earn on the investment.
As economic uncertainty lingers in 2025, dividend-paying stocks remain a top choice for income-seeking investors looking for stability amid market fluctuations.
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Market volatility and uncertain inflation outlook have not hindered the market from going up. This has also applied for MLPs/midstream players, which have benefited from Trump's pro-conventional energy rhetoric. Yet, income-focused investors face mixed feelings as future earnings prospects improve but current income streams from MLPs become less tangible.
MPLX reported stellar growth in 2024, with EBITDA increasing by 8% year-over-year and a 12.5% distribution increase, signaling strong future cash flows. Management commits to mid-single-digit EBITDA growth, with a $2 billion capital plan for 2025, focusing on NGL wellhead to water chain strategy. Risks include potential impacts on natural gas prices post-Ukraine war, which could affect MPLX's growth opportunities and U.S. NG production.
MPLX Q4 earnings gain on increased rates and higher pipeline throughputs.
MPLX (MPLX 2.37%) continues to provide investors with the best of both worlds. The master limited partnership (MLP) offers investors a very lucrative cash distribution (currently yielding over 7%).