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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