Does the Tech Stock Frenzy Make You Nervous? Here Are 3 Steady, High-Yield Dividend Pipeline Stocks to Invest In Instead.

Tech stocks have continued to zoom higher, and now the initial public offering (IPO) market is starting to heat up. While that is exciting, there is also concern that this could signal the market is getting frothy and that a forming AI bubble could pop.

So, if the tech frenzy is making you more nervous than excited when it comes to your investment portfolio, investing in some steady, high-yield pipeline stocks could be a better option for you right now. Let's look at three top master limited partnership (MLP) options.

Image source: Getty Images.

1. Energy Transfer

Energy Transfer (NYSE: ET) is a great combination of a high yield, solid growth, and an attractive valuation. With one of the largest integrated midstream systems in the U.S. and a strong presence in the Permian Basin (the U.S.'s most prolific oil basin, home to some of the country's lowest natural gas prices), the company has a large growth project pipeline tied to strong natural gas demand.

The company has several large natural gas pipeline projects, headlined by its Hugh Brinson and Desert Southwest Pipelines, both of which will transport natural gas from the Permian to markets with high demand in the Southwest. These are attractive projects, with expected earnings before interest, taxes, depreciation, and amortization (EBITDA) build multiples of 5x to 6x, which equate to high-teens returns. With Energy Transfer projected to spend between $5.5 billion and $5.9 billion on organic growth projects this year, it should see some of the best growth in the midstream space in the coming years.

Meanwhile, the stock sports a 7.2% yield and trades at a forward enterprise value (EV)-to-EBITDA multiple of just 8.3, one of the lowest valuations in the space.

2. Enterprise Products Partners

If you're looking for a sleep-well-at-night stock, look no further than Enterprise Products Partners (NYSE: EPD). This is a conservatively run pipeline MLP that has a strong balance sheet and distribution coverage ratio. It has the highest credit rating of any company in the midstream space and low leverage of just 3.2x. One often-overlooked advantage the company has is that it has low-cost debt (a weighted-average cost of 4.7%) locked up for an average of more than 16 years.

The company has increased its distribution for 27 straight years, through all kinds of difficult economic and energy markets. Enterprise is also set to see strong double-digit growth in cash flow and EBITDA next year as projects come online. However, it has cut back on growth capital expenditures (capex) this year to focus on buybacks and debt reduction, while maintaining its conservative stance.

The stock currently yields 6% and trades at a historically attractive forward EV/EBITDA multiple of 10.5.

3. Western Midstream

With an 8.7% yield, Western Midstream (NYSE: WES) has one of the highest yields in the midstream space. However, that high yield does not come with any added risk or fewer growth prospects. Following its acquisition of the Brazos Delaware assets, it will still have leverage of only 3x, and it is targeting distribution growth at a mid-to-low single-digit pace moving forward.

The company has done a nice job of repositioning itself through M&A. The Brazos deal expands its natural gas and crude gathering footprint in the Delaware Basin (which is part of the Permian) and helps diversify its customer base away from its parent, Occidental Petroleum.

The company has also made a strong push into the produced water business through its prior acquisition of Aris Water Solutions and its Pathfinder Pipeline project, which is expected to come online in the first quarter of 2027, just ahead of a new processing train at its North Loving facility.

Trading at a forward EV/EBITDA multiple of under 9, this is an attractively valued MLP with a high yield that you can buy and hold for the long term.

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