The energy sector is known for its volatility.
There's one segment of the energy industry that's actually boring and filled with high-yield opportunities.
Oil and natural gas are highly volatile commodities. That makes the energy sector fairly volatile, too. However, if you dig beneath the surface just a little, you'll see that all energy stocks aren't built the same way. Here are three midstream businesses you'll want to look at in 2026 that offer high yields and are backed by boring, fee-generating businesses.
Upstream energy companies produce oil and natural gas. Downstream energy companies process oil and natural gas into usable products, which are often commodities, as well. These segments of the energy industry are inherently volatile. The midstream is different.
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Midstream businesses own energy infrastructure assets, such as pipelines, storage facilities, and transportation assets. Effectively, the midstream connects the upstream to the downstream and the rest of the world. Midstream businesses largely charge fees for the use of their assets. The volume moving through the system is more important than the price of the commodities being moved. Given the importance of energy to modern life, volumes tend to remain high even when oil prices are low.
Right now, you can collect reliable high yields from North American midstream giants Enbridge (NYSE: ENB), Enterprise Products Partners (NYSE: EPD), and Energy Transfer (NYSE: ET).
Enbridge is the most diversified choice, with oil and natural gas pipelines, regulated natural gas utilities, and clean energy in its portfolio. The yield is 5.6%, which is the lowest on this list. That's partly because of the company's diversification, as it is part utility and part midstream stock. The dividend has been increased annually for 30 years.
Enterprise's yield is a little higher at 6.3%. This master limited partnership (MLP) has increased its dividend annually for 27 years. It only operates oil and natural gas midstream assets; however, it has a long history of being conservatively managed.
Energy Transfer has the highest yield at 7.1%. That said, the MLP cut its distribution in half in 2020 with the goal of strengthening its balance sheet. The distribution is growing again, and above where it was prior to the cut, so some investors may be willing to overlook the distribution cut. Management's plan is for slow and steady distribution growth of 3% to 5% a year for the foreseeable future. Still, this high-yielder is probably best left to more aggressive investors.
Enbridge, Enterprise, and Energy Transfer all offer large, attractive income streams. They have slightly different business profiles, and their yields rise along with the risk of their approaches. Do a deep dive today, and one or more could help power your income portfolio in 2026.
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Reuben Gregg Brewer has positions in Enbridge. The Motley Fool has positions in and recommends Enbridge. The Motley Fool recommends Enterprise Products Partners. The Motley Fool has a disclosure policy.