Midstream stocks, or shares in companies that own energy assets like oil and gas pipelines and storage facilities, are an unglamorous yet highly profitable niche within the energy sector.
Operating as a “toll road” type business, generating fixed fees largely unaffected by volatile fossil fuel prices, these companies can quietly mint profit during boom times and bust times in the oil sector
This can create fantastic compounding potential for investors more concerned with capital growth. This holds especially true for owners of the following three pipeline stocks: Enbridge (NYSE: ENB), Enterprise Products Partners (NYSE: EPD), and MPLX (NYSE: MPLX). 1. Enbridge: The slow and steady compounder Enbridge is a diversified energy and utility infrastructure company.
In addition to owning over 18,000 miles of pipeline across the U.S. and Canada, Enbridge operates a gas utilities company serving over 7 million customers. The company has also invested extensively in renewable energy infrastructure. Diversification notwithstanding, it’s Enbridge’s midstream assets that make it a steady cash generator, enabling it to consistently raise its dividend over time.