A fee-based energy infrastructure partnership operating in some of North America’s most productive oil and gas basins has earned an increased allocation in the Best Dividend Stocks Portfolio. This midstream master limited partnership gathers, compresses, processes, and transports natural gas, crude oil, and natural gas liquids, while also managing produced water for upstream producers — a service line that has grown meaningfully following a late-2025 acquisition.
The partnership’s cash flows are largely shielded from direct commodity price swings through long-term fee-based contracts, giving it a revenue profile that is more predictable than most energy companies. At a forward yield of 9.03%, the partnership delivers high current income that is grounded in contracted cash flows rather than commodity price assumptions, making the yield more durable than the headline number alone might suggest. With a beta of 0.70, monthly price movements tend to stay well below typical equity market swings, which is a meaningful quality for income-focused investors. The 3-year dividend compound annual growth rate of 20% ranks in the top 20% of all dividend-paying stocks, reflecting a management team that has consistently and aggressively rewarded unitholders over time.
Near-term headwinds are real — a key customer has temporarily shifted drilling activity away from acreage serviced by this partnership, and softer natural gas prices at a key West Texas hub created some volume pressure entering 2026. Despite that, management reaffirmed its commitment to distributions, increased its 2026 distribution guidance, and is targeting approximately $1 billion in free cash flow for the year, providing a solid foundation for the current payout. The partnership closed 2025 with record throughput volumes in its two largest basins and outperformed the high end of its own free cash flow guidance, demonstrating operational discipline even in a volatile commodity environment. The forward yield of 9.03%, combined with a leverage ratio that is tighter than the peer group average, positions this as a high-income holding with a credible financial floor.
Increasing the position in the Best Dividend Stocks Portfolio reflects confidence in the partnership’s ability to generate durable, fee-backed cash flows, maintain its distribution trajectory, and recover throughput volumes as producer activity normalizes.
