Three Exceptionally High-Dividend Shares I Intend to Permanently Hold
In the heart of 2025, three high-yield midstream Master Limited Partnerships (MLPs) — Energy Transfer (ET), Enterprise Products Partners (EPD), and Western Midstream Partners (WES) — are demonstrating robust current performance and promising growth outlooks. These MLPs, renowned for their substantial cash flows, substantial capital investment programs, and strategic growth projects, are capturing the attention of income-oriented investors seeking growth with yield.
Energy Transfer (ET)
For the second quarter of 2025, Energy Transfer reported impressive financial results, including revenue of $19.242 billion, GAAP EPS of $0.32, net income of $1.163 billion, and adjusted EBITDA of $3.87 billion. Distributable cash flow (adjusted) reached $1.96 billion, showcasing Energy Transfer's strong cash generation capacity [1].
The company's growth outlook is equally promising. Energy Transfer expects 2025 adjusted EBITDA to be at or slightly below the low end of its $16.1–$16.5 billion guidance range, with growth capital expenditures expected at about $5 billion. The partnership is entering a new growth phase, highlighted by a large backlog of projects, including the recent $5.3 billion Desert Southwest natural gas pipeline project, which is set to complete by the end of 2029 [1][5]. This pipeline will expand capacity by 1.5 billion cubic feet per day from the Permian to markets in Arizona and New Mexico, supported by substantial long-term commitments [1][5]. Energy Transfer's current yield stands around 7.4% [5].
Enterprise Products Partners (EPD)
Enterprise Products Partners is known for its consistency and financial stability, with a strong free cash flow coverage of its distributions (approximately 1.6x), an A credit rating, and a low leverage ratio (~3.1x) [4].
The company plans to spend between $4 billion and $4.5 billion in growth capital expenditures this year, marking a substantial increase from $1.6 billion in 2022. It has $6 billion in organic growth projects expected to enter commercial service in H2 2025. Further, capital spending of $2.2–$2.5 billion is planned for 2026. These expansions are expected to accelerate cash flow growth through at least 2027, enabling continued distribution increases and share/unit repurchases [2][4]. Enterprise also leverages strategic acquisitions (such as the recent gas gathering business from Occidental Petroleum) to enhance cash flow and growth potential [4].
Western Midstream Partners (WES)
Western Midstream Partners offers the highest yield among the three, supported by stable cash flows and disciplined management. The partnership's strong parent company backing (Occidental Petroleum owns more than 40%) anchors its cash flow via cost-of-service and minimum volume commitment contracts, providing it with highly visible and stable cash flow [2].
Western Midstream is starting to ramp up growth, focusing on the produced water business. Key growth projects include the Pathfinder produced water system (handling over 800,000 barrels/day by 2027) and the expansion of the North Loving gas processing plant. The recently announced $2 billion acquisition of Aris Water Solutions is expected to be accretive immediately, adding dedications, minimum volume commitments, and providing $40 million in cost synergies [2].
Summary Table
| MLP | Q2 2025 Performance Highlights | Growth CapEx (2025) | Key Growth Drivers | Yield (approx.) | |-------------------------|--------------------------------------------------|--------------------------|-----------------------------------------------------------------------|-----------------| | Energy Transfer (ET) | Revenue $19.24B, Adj. EBITDA $3.87B, DCF $1.96B | ~$5 billion | Desert Southwest pipeline; backlog of growth projects | 7.4% | | Enterprise Products (EPD)| Strong cash flow coverage; A credit rating | $4B - $4.5B | $6B organic projects; acquisitions; new gas processing plant | High | | Western Midstream (WES) | Stable cash flow with strong parent support | Not specified explicitly | Produced water projects; $2B Aris Water Solutions acquisition | Highest yield |
All three MLPs benefit from robust distribution coverage, strong balance sheets, and a pipeline of growth projects expected to expand volumes and cash flow through the next several years. Energy Transfer is notable for its sizable recent pipeline project, Enterprise for its financial strength and consistent growth, and Western Midstream for its high yield and niche produced water focus.
These factors position them well within the midstream sector for income-oriented investors seeking growth with yield in 2025 and beyond [1][2][4][5]. It's worth noting that Enterprise Products Partners has increased its distribution for 26 consecutive years. Energy Transfer is ready to move forward with a long-awaited liquified natural gas (LNG) export project. Energy Transfer's largest MLP position, and its balance sheet is now in a much better position after reducing leverage and improving its financial position.
References:
- Energy Transfer Q2 2025 Earnings Release
- Western Midstream Partners Q2 2025 Earnings Release
- Enterprise Products Partners Q2 2025 Earnings Release
- Enterprise Products Partners Investor Presentation
- Energy Transfer Q2 2025 Earnings Call Transcript
- Western Midstream Partners Q2 2025 Earnings Call Transcript
- Enterprise Products Partners Q2 2025 Earnings Call Transcript
- In the booming finance industry, 2025 has seen a surge of interest in the midstream sector, as three high-yield Master Limited Partnerships (MLPs), Energy Transfer (ET), Enterprise Products Partners (EPD), and Western Midstream Partners (WES), demonstrate strong performance and promising growth prospects.
- Western Midstream Partners' substantial yield, underpinned by stable cash flows and strong parent support, has attracted income-oriented investors seeking growth with yield. The company's focus on the produced water business, with key growth projects and a recent $2 billion acquisition, promises potential growth through 2027 and beyond.
- Enterprise Products Partners' financial strength, consistent growth, and impressive 26-year track record of distribution increases make it a viable option for those investing in the energy sector. Prospective growth capital expenditures of $4B - $4.5B this year, along with strategic acquisitions, are expected to further accelerate cash flow growth through 2027.
