The Midstream: Pipelines to Prosperity

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There is one and only one S&P 500 sector that is up massively this year: energy.

You’d be forgiven if you missed the ideal moment to invest. But there’s an often-overlooked part of the energy sector that is essential to our way of life and still exceedingly cheap.

I’m talking about midstream oil and gas.

Midstream companies operate pipelines, tanker ships, and storage facilities. They are tasked with getting hydrocarbons from the production sites to the refineries.

The assets these midstream companies own are critical infrastructure. If midstream pipelines cease to operate, our day-to-day lives would drastically change.

There is a lot to like about these companies besides the essential nature of their businesses. They reward shareholders – dividend yields of 6% or more are common. They gush cash flow. And they’re historically cheap.