A high yield energy infrastructure partnership just became a bigger part of our income focused portfolio, and the numbers explain why. Its beta of 0.45 shows that monthly price swings move largely independent of the broader stock market. That trait appeals to investors who want steady income without added volatility. On top of that stability, this partnership has grown its dividend at an 11% compound annual rate over the past three years. That pace outruns most peers in its industry. It points to a management team that keeps rewarding unitholders while still funding new pipeline and processing projects.
The business gathers, processes and transports crude oil, natural gas and natural gas liquids. It moves these products through an extensive network of pipelines, storage terminals and processing plants that connect producers to refineries and export markets. Long term contracts with a major refining partner support close to 90% of its logistics revenue, giving cash flow predictability that is rare in the energy sector. Growth is coming from new natural gas processing capacity built to meet rising demand tied to data centers and electrification. That expansion sits alongside real risks, including swings in natural gas liquids prices and a heavy reliance on that same refining partner. Shares currently yield 7.62% on a forward basis, a level that stands well above the sector average.
We increased our position in this holding within the Best Dividend Stocks Portfolio. Its combination of a high starting yield, disciplined balance sheet management and a promising growth pipeline makes it a fitting addition to that income focused strategy. Steady, fee based cash flow like this is exactly what the portfolio seeks when adding to an existing holding.
