3 Pipeline Stocks to Buy in March

For investors seeking a steady, passive stream of income, the energy midstream sector is a good option. While oil and gas prices can be volatile, pipeline stocks largely function as energy toll roads and tend to have predictable cash flows through long-term transportation contracts. As a result, they pay out strong and stable distributions.

Let's look at three pipeline master limited partnerships (MLPs) I've been buying this month.

1. Energy Transfer

Energy Transfer (NYSE: ET) offers a great combination of an attractive yield, currently sitting at 7.1%, and solid growth opportunities. The company has cleaned up its balance sheet and has a strong distribution coverage ratio, which came in at nearly 1.8 times last quarter. Meanwhile, it is looking to grow its distribution at a 3% to 5% yearly pace moving forward.

The company also has one of the best backlogs of growth projects in the sector, given its strong position in the Permian Basin, which has some of the cheapest natural gas in the U.S. Energy Transfer is currently building two large natural gas pipeline projects to take natural gas away from the basin, with one taking natural gas into the Arizona and New Mexico markets and the other into Texas. It also has numerous projects tied to artificial intelligence (AI) data centers and the utilities that serve them.

For investors looking for a combination of yield and growth, this is a stock to own. Notably, it is also one of the cheapest stocks in the sector, trading at a forward enterprise value-to-EBITDA (earnings before interest, taxes, depreciation, and amortization) multiple (the most common way to value pipeline stocks) of just 8.6 times.

Image source: Getty Images.

2. Enterprise Products Partners

For investors seeking a safe stock with a solid yield and a growing distribution, Enterprise Products Partners (NYSE: EPD) is a great choice. The company has raised its distribution for 27 straight years through a variety of difficult market conditions. The stock currently has a 5.9% yield and has been growing its distribution at a roughly 3% to 4% annual clip.

The company has historically been conservative and maintains one of the best balance sheets in the space, with leverage of just 3.3 times. Its distribution is also well covered, with a coverage ratio of 1.8 times. The company is reducing its capital expenditure (capex) budget this year, which will give it ample discretionary cash flow to buy back its stock, reduce debt further, and make bolt-on acquisitions.

And while its growth is expected to be modest this year, the company has projected that its adjusted EBITDA and cash flow will climb by double digits in 2027 as new projects come online.

Given its history and conservative nature, Enterprise is a nice sleep-well-at-night type of stock to own for the long haul.

3. Genesis Energy

For investors looking for a pipeline stock that is a bit spicier with perhaps more potential upside, Genesis Energy (NYSE: GEL) could be the ticket. The company began a major turnaround last year when it sold its unpredictable soda ash operations and used the proceeds to retire its expensive preferred units and to pay down debt, helping to significantly reduce its interest expense.

It followed that up earlier this year by retiring debt due in 2028 that carries a 7.75% interest rate and replacing it with notes with a 6.75% interest rate due 2034, and it has continued to buy back preferred units. It also ended 2025 with essentially no debt on its revolver at year-end when taking into account cash on hand.

Genesis is more than a debt and interest expense reduction story, though. Two large Gulf of Mexico oil projects have been tied into its offshore pipeline system, which is set to drive growth. The company projected EBITDA would grow by between 15% to 20% in 2026 over its 2025 normalized EBITDA (this excludes the contribution from its since sold soda ash business and assumes a normal hurricane season), or potentially more.

While Genesis carries more risk given its high leverage (5.12 times at year-end), it has no major capex this year and had a 2.8 times coverage ratio last quarter. It showed confidence in its business by raising its quarterly distribution by 9%, and it will have excess cash to reduce its leverage in the coming years. While it only has a 4% yield, the stock is an attractive turnaround play with a lot of upside.

Geoffrey Seiler has positions in Energy Transfer, Enterprise Products Partners, and Genesis Energy. The Motley Fool recommends Enterprise Products Partners. The Motley Fool has a disclosure policy.