MPLX offers an ultra-high, reliable distribution.
Energy Transfer recently announced its 19th consecutive distribution increase.
Enterprise Products Partners is the "gold standard" among pipeline stocks.
Income investing offers a simple premise. First, invest a fixed amount of money into one or more assets. Second, sit back and collect the income as it rolls in. What isn't always so simple, though, is selecting the best assets that can generate dependable income.
However, the energy sector is loaded with great ideas to achieve this goal. If you've got $10,000 to invest in September, here are three energy stocks to allocate equally to generate roughly $667 in annual income from your initial investment.
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MPLX LP (NYSE: MPLX) is a master limited partnership (MLP) with large-scale midstream energy infrastructure and logistics operations. Its assets include pipelines that transport crude oil and refined products, an inland marine business, crude oil and natural gas gathering systems, natural gas processing facilities, storage caverns, and terminals.
This pipeline stock offers a distribution yield of 7.2%. An investment of $3,333 (one-third of the initial $10,000) in MPLX would generate annual income of around $240.
But is this ultra-high yield reliable? I think so. MPLX's distribution coverage currently stands at a healthy 1.3x. The company has also increased its distribution for 13 consecutive years. MPLX will likely extend that streak.
September could be a good time to buy this stock. MPLX expects stronger growth in the second half of 2026, especially in the fourth quarter, as the midstream company brings its Belvieu Alternative Natural Gas Liquids (BANGL) pipeline, the Blackcomb pipeline, and the expansion of its Delaware sour gas treatment facility online.
Like MPLX, Energy Transfer LP (NYSE: ET) is a midstream MLP. It operates around 140,000 miles of pipelines, plus processing and storage facilities and terminals. Energy Transfer has midstream assets in all of the major U.S. producing basins.
Like MPLX, Energy Transfer also pays a juicy distribution. Its yield currently tops 6.3%. An initial investment of $3,333 would generate an annual income of around $210.
Energy Transfer recently announced its 19th consecutive distribution increase. The company is targeting annual distribution growth of between 3% and 5%. This goal appears to be attainable given Energy Transfer's strong distribution coverage.
The data center boom is a top growth driver for Energy Transfer. Examples of this tailwind include agreements with Oracle (NYSE: ORCL) to provide natural gas to three U.S. data centers, with Nexus to supply gas for its AI hyperscape campus under construction in central Texas, and with Crusoe to provide natural gas to its AI factory campus in Abilene, Texas.
Let's go three for three with another great midstream energy stock -- Enterprise Products Partners LP (NYSE: EPD). It's also an MLP. Enterprise operates over 50,000 miles of pipeline, liquids storage facilities that hold over 300 million barrels, natural gas processing trains, and other midstream assets.
This midstream company pays a distribution yield of roughly 5.7%. If you invested $3,333 in Enterprise Products Partners, you should be able to rake in around $189 in annual income.
I predict the actual amount of income you'll receive will be even higher, though. Enterprise Products Partners has increased its distribution for an impressive 28 consecutive years and shows no signs of ending that streak anytime soon.
Some view Enterprise Products Partners as the "gold standard" of pipeline stocks. I agree with that take. The company has the strongest balance sheet in the midstream energy industry. Its management runs the business conservatively and has plenty of skin in the game. Enterprise Products Partners should be a highly dependable source of income over the long run.
Before you buy stock in Enterprise Products Partners, consider this:
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Keith Speights has positions in Energy Transfer and Enterprise Products Partners. The Motley Fool has positions in and recommends Oracle. The Motley Fool recommends Enterprise Products Partners. The Motley Fool has a disclosure policy.