High yielding dividend stocks often have high risk profiles. with about 8% yield, MPLX (NYSE: MPLX ) It appears to be in the high risk category. However, this could not be further from the truth.
The Master Limited Partnership (MLP) — an entity that files a Schedule K-1 federal tax form each year — has a fortified financial profile. Moreover, the pipeline company has secured visible growth through 2029. These features mean you can buy and hold it with confidence. High yield dividend stocks At least until the end of the decade.
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MPLX recently reported its fourth quarter and full year financial results. The MLP generated $5.8 billion of distributable cash flow last year, enough to cover its high-yield distributions by 1.4 times. The MLP generated $1 billion in free cash flow after paying distributions, enabling it to retain cash as the fund grows.
The pipeline company invested well over that amount last year as growth investments totaled $5.5 billion. It made several acquisitions, including the $2.4 billion purchase of Northwind Midstream. The MLP also invested capital in several expansion projects.
Even with that huge growth investment, the MLP ended the year with a rock-solid financial profile. Its leverage ratio of 3.7 times is below the 4.0 times range that its steady cash flow can support. The MLP’s strong financial profile and growing cash flow enabled it to increase its distribution payout by 12.5% last year.
MPLX expects to invest an additional $2.4 billion in growth capital projects this year. MLP has a long list of extensions. It has its parent company (Marathon Petroleum) Galveston Bay refinery that it expects to complete in 2028 and 2029. It is also building a Gulf Coast LPG export terminal in a strategic partnership. Oneok Should come online in June 2028. In addition, it has invested in several joint ventures to build new natural gas pipelines that should enter service in the 2026 to 2029 time frame.
MLPs continue to secure new growth capital projects. It recently approved the construction of the Secretariat II gas processing plant (with an in-service date in the second half of 2028) and the Marcellus gathering system expansion (with an in-service date in the first half of 2028). These projects further enhance its growth visibility over the next few years.
