The recent surge in oil and gas prices is prompting investors to reconsider energy stocks, but many remain wary of the inherent volatility tied to commodity prices. Instead, analysts suggest focusing on midstream companies, which transport oil and gas rather than producing it. These firms, such as MPLX and Oneok, generate stable profits by charging fees for pipeline usage, making them attractive for conservative income investors seeking reliable returns.

MPLX boasts a forward yield of 7.7% and has consistently raised its annual distribution for 12 years, supported by increasing distributable cash flow. Meanwhile, Oneok, with a forward yield of nearly 5%, has seen its earnings surge significantly due to strategic acquisitions and rising natural gas production. Both companies are well-positioned to benefit from the growing demand for energy while maintaining stable profitability.

For market professionals, investing in high-yielding midstream stocks like MPLX and Oneok could provide a safer approach to capitalizing on the energy sector’s upward momentum without the risks associated with direct commodity exposure.

Source: fool.com