Energy Transfer, Kinder Morgan, and Williams have stable cash flow from fee-based assets, making them attractive.
From Yahoo Finance: 2025-06-22 12:34:00
Energy Transfer, Kinder Morgan, and Williams earn 90%, 95%, and 91% of their earnings, respectively, from fee-based arrangements or stable sources. They operate money-printing energy midstream assets, making them attractive options for investors seeking passive income. Cash flows from these assets tend to be more stable due to minimal exposure to commodity price volatility.
Energy Transfer operates a nationwide network of midstream assets supported by fee-based contracts and government-regulated rate structures. It generated over $2.3 billion in distributable cash flow during the first quarter, retaining cash for expansion projects and maintaining a strong balance sheet. The MLP plans to increase its distribution by 3% to 5% per year.
Kinder Morgan owns a significant energy infrastructure portfolio, deriving 64% of its cash flow from take-or-pay contracts and 26% from fee-based sources. The company generated $1.2 billion in cash flow from operations during the first quarter, covering its dividend outlay by roughly 2 times. It has $8.8 billion worth of expansion projects under construction.
Williams operates a large natural gas infrastructure platform, with regulated transmission assets and fee-based gathering and processing operations supporting its cash flow. The company generated nearly $1.5 billion in available funds from operations during the first quarter, covering its dividend comfortably by 2.4 times. Williams is investing in various growth projects to enhance its cash flow through 2030.
Energy midstream companies like Energy Transfer, Kinder Morgan, and Williams are known for their fee-based assets that generate stable cash flow. These companies provide attractive and growing dividends, making them ideal choices for investors seeking steady passive income. Energy Transfer, however, was not among the 10 best stocks identified by the Motley Fool Stock Advisor analyst team.
Read more at Yahoo Finance: These Energy Dividend Stocks Print Money