3 High-Yield Pipeline Stocks to Buy Now and Hold Forever

The data center and artificial intelligence (AI) boom has profoundly shifted the growth trajectory for midstream energy companies. AI data centers require immense, uninterrupted power, and tech hyperscalers are increasingly turning to natural gas to guarantee 24/7 reliability where the electrical grid is constrained.

Enterprise Products Partners (NYSE: EPD), Enbridge (NYSE: ENB), and Energy Transfer (NYSE: ET) are benefiting from this trend and all three of these energy stocks are up at least 19% so far this year.

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Great dividend yields

All three have high-yield dividends that yield more than four times that of the average S&P 500 dividend. Enterprise Products Partners has increased its dividend for 28 consecutive years, including a 2.8% raise this year to $0.55 per quarterly share. The yield, at its current share price, is around 5.58%. It is covered 1.8x by its distributable cash flow (DCF), leaving room for continued increases.

In December, Enbridge raised its quarterly dividend by 3% to 0.97 Canadian dollars per share, the 31st consecutive year of increases. The yield, at its current share price, is 4.87%. The company is forecasting yearly DCF of $5.30 to $6.10, meaning that the DCF payout ratio will be between 60% and 70%.

Energy Transfer has the highest-yielding dividend of the trio, at around 6.6% at its current share price. It has raised its dividend for 18 consecutive quarters since a difficult 50% distribution cut in late 2020. In April, it raised its quarterly distribution by more than 3% to $0.3375.

Steady growth in DCF and volumes

Over the past decade, all three stocks have seen triple-digit increases in revenue and earnings per share (EPS). While that growth wasn't consistent across all three companies in the first quarter of 2026, they all posted positive earnings reports.

In the first quarter, Enterprise Products Partners reported adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $2.7 billion, up 10% year over year, led by record natural gas liquids (NGL) volumes. DCF was $2.7 billion, up 34.5% over the same quarter a year ago.

Enbridge saw DCF rise by 1% year over year in the first quarter to CA$3.9 billion, even though its adjusted EBITDA fell .003% to CA$5.81 billion.

In the first quarter, Energy Transfer reported revenue of $27.7 billion, up 32% year over year, and DCF of $2.7 billion, up 16.8% over the first quarter of 2025. That was mainly due to record NGL and refined products terminal volumes, which increased by 19%.

Solid protection from commodity price swings

The defining feature of all three operators is their toll-road financial model. They do not make money based on oil or natural gas prices, but rather on the volume passing through their pipes. Between 85% and 98% of their combined cash flows are derived from long-term, fee-based, or cost-of-service contracts.

Their contracts are heavily insulated against inflation with long-term agreements that feature built-in escalation provisions linked to inflation indexes. This structure generates a highly predictable DCF.

Enterprise Products Partners and Energy Transfer had distribution coverage ratios of roughly 1.7 to 1.8, meaning they generate nearly double the cash required to pay out their hefty dividends, leaving billions in free cash flow to fund new growth projects (such as powering AI data centers) without taking on dangerous debt. Enbridge has even more leeway. It maintains a 60% to 70% DCF payout ratio target rather than reporting a traditional coverage multiple. Inverting this target yields a structural coverage ratio equivalent of roughly 1.43 to 1.67.

One risk: Falling oil prices

If oil prices were to plummet, midstream operators would be adversely affected because upstream operators (the companies that produce oil by drilling) would slow production, which in turn would hurt pipeline volumes. However, the longer the Strait of Hormuz sees slowed traffic, the higher oil prices are expected to remain.

When crude oil prices are high, upstream producers generate massive profits. This incentivizes them to maximize production, drill their top-tier inventory, and greenlight new projects. Because midstream operators make their money on throughput (the physical volume of oil, gas, and natural gas liquids moving through their pipes), more drilling directly translates to higher utilization rates and rising revenue.

One stock stands out

Of the three, Energy Transfer stands out as the best buy right now. By several valuation measures, it is the best-priced of the three. On top of that, it has the best dividend yield and double-digit revenue and DCF growth as of the last quarter.

While Enterprise Partners and Enbridge are focused on wrapping up existing capital cycles and maintaining steady, conservative growth, Energy Transfer is leaning more heavily into an aggressive expansion phase designed to capture the AI data center boom. While that presents risks, it appears to be at the beginning of a growth cycle that makes it a good buy right now.

James Halley 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.