A handful of midstream names have already announced increases to their dividends.
The midstream segment is known for offering generous income, making it a primary reason many advisors use MLPs and energy infrastructure companies in portfolios.
It’s still early in the cycle of third-quarter midstream earnings, but many announcements of third-quarter dividends have already surfaced.
Dividend Growth for the Third Quarter
Cheniere (LNG) has announced the largest sequential percentage increase to its dividend across midstream names that have announced third-quarter payouts. The corporation declared a quarterly dividend of $0.435 per share, representing a 10.1% increase over the previous quarter.
So far, most of the quarter-over-quarter distribution increases have come from MLPs.
MPLX LP (MPLX) has announced a quarterly distribution of $0.85 per unit, which is a 9.7% increase over the second quarter.
Meanwhile, Hess Midstream (HESM) has raised its third-quarter distribution by 2.7% to $0.6175 per share.
Western Midstream (WES) has declared a quarterly distribution of $0.5750, representing a 2.2% increase quarter over quarter.
Delek Logistics Partners (DKL) has declared a distribution of $1.045 for the third quarter, a 1.0% increase compared to the second quarter of 2023.
Finally, Energy Transfer (ET) has increased its distribution to $0.3125 per unit, a 0.8% increase quarter over quarter. The partnership has increased its distribution payout by $0.0025 each quarter in 2023.
Which ETFs Provide Exposure to Growing Midstream Dividends
Investors can get exposure to MLPs with the Alerian MLP ETF (AMLP ) and the ETRACS Alerian MLP Infrastructure Index ETN Series B (MLPB ). The funds’ underlying index is a capped, float-adjusted, cap-weighted composite of energy infrastructure MLPs. These MLPs earn most of their cash flow from midstream activities.
Cheniere is a top holding in the Alerian Energy Infrastructure ETF (ENFR ). The ETF’s underlying index is a composite of North American midstream energy infrastructure companies. The index includes MLPs (25%) and corporations (75%) engaged in the pipeline transportation, storage, and processing of energy commodities.
For more news, information, and analysis, visit the Energy Infrastructure Channel.
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