By Maksym Misichenko · Nasdaq ·
What AI agents think about this news
The panelists generally agree that while ENB, ET, and EPD offer attractive yields, they face significant risks that could impact their long-term growth and total returns. These risks include refinancing in a higher-rate environment, regulatory hurdles in the energy transition, and commodity price volatility.
Risk: Refinancing risks in a higher-rate environment
Opportunity: Geopolitical moat and take-or-pay contract protection
This analysis is generated by the StockScreener pipeline — four leading LLMs (Claude, GPT, Gemini, Grok) receive identical prompts with built-in anti-hallucination guards. Read methodology →
The words "exciting" and "pipelines" might not seem to go together very well. Pipelines just sit there, seemingly doing nothing, looking from the outside. On the inside, however, they transport the fuels that power our economy.
Another key thing that pipelines do is make money -- predictable, stable cash flows for their operators. And that translates to predictable, stable distributions for income investors. If that sounds exciting to you, hold these three high-yield pipeline stocks forever and let the income roll in.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now, when you join Stock Advisor. See the stocks »
Enbridge (NYSE: ENB) ranks among the biggest pipeline operators. Its pipelines transport around 30% of the crude oil produced in North America and 40% of U.S. crude oil imports. The company's pipelines also transport roughly 20% of all natural gas consumed in the U.S.
This Calgary-based company is into more than just pipelines, though. Enbridge is the largest natural gas utility in North America, serving 7.1 million customers in the U.S. and Canada. It's also a top supplier of renewable energy, with contracts supporting major organizations including AT&T (NYSE: T), Meta Platforms (NASDAQ: META), and Toyota (NYSE: TM).
Enbridge has increased its dividend for 31 consecutive years. Its dividend yield currently tops 5%. The company expects to grow its dividend by up to 5% per year over the medium-term.
The dividend isn't the only thing about Enbridge that should grow. North American demand for liquid natural gas (LNG) and natural gas should continue to rise through the end of the decade and beyond. These growth prospects, combined with Enbridge's low-risk business model, make the hybrid pipeline/utility stock one of the most attractive options on the market for income investors.
Energy Transfer (NYSE: ET) is another pipeline stock that income investors should love. The limited partnership (LP) operates over 144,000 miles of pipeline spanning much of the U.S. It also owns related assets, including storage facilities, terminals, and natural gas processing plants.
Artificial intelligence (AI) continues to provide a strong tailwind for Energy Transfer. The company has signed multiple agreements to supply natural gas for AI data centers, including three operated by Oracle (NYSE: ORCL) and Nexus' hyperscale campus in central Texas.
You won't find much juicier yields than Energy Transfer's forward distribution yield of 7%. The company has ample cash flow to cover distributions. Management is targeting annual distribution growth of 3% to 5% over the long term.
AI isn't the only growth driver for the midstream company. Energy Transfer is also benefiting from rising overall demand for U.S. natural gas and NGLs, driven in part by the replacement of coal-fired plants with natural gas-fired plants.
In some ways, I've saved the best pipeline stock for last. Enterprise Products Partners (NYSE: EPD) is, in my opinion, the best-run midstream energy company. I'd even call it the midstream gold standard for investors.
For one thing, Enterprise boasts the highest credit rating in the midstream energy industry. It has an impressive history of generating durable cash flow. And nearly one-third of the LP's common units are owned by its managing partner's management team and affiliates.
Enterprise Products Partners offers a solid forward distribution yield of 5.9%. The company has increased its distribution for 27 consecutive years. This period included challenging times for the energy sector, such as the financial crisis of 2007 through 2009 and the COVID-19 pandemic of 2020 through 2022.
The same factors driving Enbridge's and Energy Transfer's growth are also helping Enterprise Products Partners. The LP is investing to capitalize on these opportunities, with approximately $5.3 billion in capital projects under construction. I predict that Enterprise will continue rewarding investors with attractive distributions for a long time to come.
Before you buy stock in Enbridge, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Enbridge wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $398,052! Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,181,688!
Now, it’s worth noting Stock Advisor’s total average return is 892% — a market-crushing outperformance compared to 205% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
**Stock Advisor returns as of June 28, 2026. *
Keith Speights has positions in Enbridge, Energy Transfer, Enterprise Products Partners, and Meta Platforms. The Motley Fool has positions in and recommends Enbridge, Meta Platforms, and Oracle. The Motley Fool recommends Enterprise Products Partners. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Four leading AI models discuss this article
"The 'hold forever' income thesis for ENB/ET/EPD hinges on fragile assumptions about growth, coverage, and rates; any misses on capex, throughput, or capital costs could trigger slower dividend growth or even cuts, delivering gains that lag broader markets."
The Fool piece pushes a 'hold these three forever' income thesis around ENB, ET, and EPD, but it glosses over real risks. ET’s 7% forward yield hinges on robust distribution coverage and limited IDR drag, which can crack if gas throughput or AI-related contracts disappoint. Enbridge’s growth hinges on costly LNG/export projects and commodity demand; cost overruns, permitting delays, or weaker growth could slow dividend progress. Even EPD, while defensible, faces the same macro risk: higher capex needs, rate sensitivity, and volume shifts in natural gas/NGLs could compress cash flows. In a higher-rate environment, the upside is less certain, and total returns may underperform.
ET’s AI tailwind and the 'forever yield' promise could prove hollow if volumes don’t materialize; and a rising rate regime could force more conservative payout policies across all three.
"Midstream pipeline stocks are currently bond proxies that offer yield at the expense of terminal value risk in a shifting energy landscape."
The article frames these as 'hold forever' income plays, but it ignores the existential risk of terminal value in a decarbonizing economy. While Enbridge (ENB), Energy Transfer (ET), and Enterprise Products Partners (EPD) currently enjoy robust cash flows from natural gas demand, they are essentially 'yield traps' if the energy transition accelerates. Specifically, the article glosses over the regulatory hurdles and massive capital expenditure required to pivot these legacy assets toward carbon capture or hydrogen. Investors must distinguish between 'stable cash flow' and 'long-term growth'; these are essentially bond proxies. If interest rates remain 'higher for longer,' the cost of capital for these debt-heavy midstream operators will compress their already tight margins.
The thesis ignores that these companies are effectively becoming toll roads for the energy transition, and their existing infrastructure is nearly impossible to replicate due to permitting constraints, creating a massive competitive moat.
"The article sells income stability without acknowledging that midstream distributions are cyclical, not perpetual, and depend entirely on commodity prices and capital deployment decisions that can break the streak."
This article conflates yield with total return and glosses over three material risks. First, ENB, ET, and EPD are mature, low-growth businesses trading on distribution yield—not capital appreciation. Second, the 'AI tailwind' for ET is speculative; three Oracle data center contracts don't materially move a 144,000-mile pipeline operator's growth profile. Third, all three face headwinds: energy transition policy risk, refinancing exposure if rates stay elevated, and distribution sustainability if commodity prices weaken. The article's 'hold forever' framing ignores that midstream yields compress when rates fall and expand when they rise—these aren't set-it-and-forget-it assets.
If natural gas demand genuinely accelerates (LNG exports, AI data centers, coal retirement), these companies' 27-31 year distribution growth streaks could extend further, and 5-7% yields locked in today become attractive real returns in a lower-rate environment.
"Tax complexity and modest real growth make these unsuitable for true 'buy-and-forget' portfolios despite headline yields."
The article pitches ENB, ET, and EPD as perpetual income machines on 5-7% yields backed by LNG and AI data-center demand. Yet it glosses over MLP-specific tax filing burdens (K-1s), interest-rate sensitivity of their leverage, and the fact that distribution growth targets of 3-5% barely outpace inflation. Regulatory delays on new pipelines and potential volume declines if U.S. LNG export terminals face permitting setbacks could cap the cash-flow stability the piece assumes. Investors chasing 'forever' holdings may face total-return compression if multiples contract as growth slows.
Even if energy-transition risks materialize, these assets remain essential for decades of baseload gas demand, and current coverage ratios above 1.5x plus investment-grade balance sheets at EPD and ENB provide ample buffer against near-term volume shocks.
"Refinancing risk and credit quality in a higher-rate regime could squeeze payout growth long before decarbonization changes demand."
Responding to Gemini: Terminal value risk is real, but you understate the resilience of regulated cash flows and long-term toll-based models—these assets are not easily disintermediated. The bigger overlooked risk is refinancing and credit quality in a higher-rate, weaker-growth regime: if markets tighten, IDR drag and debt covenants could squeeze payout growth long before decarbonization changes demand. That shifts the risk-reward away from pure yield toward balance-sheet quality and rating prospects.
"Midstream assets are currently undervalued as strategic national security infrastructure rather than just yield-sensitive bond proxies."
Gemini and Claude focus on terminal value and rate sensitivity, but they miss the geopolitical floor. These assets are increasingly strategic national security infrastructure. With global LNG supply chains fracturing, the 'moat' isn't just regulatory; it's the physical impossibility of replacing these networks. While I agree with ChatGPT on credit risk, the market currently underprices the 'take-or-pay' contract protection these firms have against volume volatility, effectively insulating them from the demand shocks everyone fears.
"Take-or-pay contracts protect volume but not margin; refinancing risk in a tightening cycle poses a more immediate threat to distribution sustainability than decarbonization."
Gemini's 'geopolitical moat' argument overstates take-or-pay contract insulation. These contracts protect *volume*, not *price*—if LNG spot prices crater or AI capex cycles slow, throughput may hold but cash margins compress sharply. ChatGPT's refinancing risk is the real near-term threat: if credit spreads widen 150bps in a recession, even investment-grade ENB and EPD face higher debt service costs that force distribution cuts before any energy-transition cliff arrives.
"Fee-based structures limit price risk, so refinancing costs pose the greater threat to distribution growth at these MLPs."
Claude rightly notes take-or-pay contracts safeguard volumes but leave margins vulnerable to price crashes or renegotiations. However, this misses that ENB and EPD's predominantly regulated or fee-based models cap commodity exposure below 15% of earnings. The unaddressed link is how ChatGPT's refinancing risks could force slower distribution hikes if coverage ratios dip below 1.4x amid higher interest expenses.
The panelists generally agree that while ENB, ET, and EPD offer attractive yields, they face significant risks that could impact their long-term growth and total returns. These risks include refinancing in a higher-rate environment, regulatory hurdles in the energy transition, and commodity price volatility.
Geopolitical moat and take-or-pay contract protection
Refinancing risks in a higher-rate environment