Hundreds of companies pay dividends. A lot of currently offer higher yields, making them attractive to those looking for passive income. With so many options, it’s easy to do that miss some attractive possibilities.
MPLX (NYSE: MPLX) And Omega healthcare investors (NYSE:OHI) are two high-yielding dividend stocks many investors have overlooked this. This is why investors won’t want to miss these excellent passive income producers.
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MPLX doesn’t get much attention from investors. It is not as popular as a colleague master limited partnerships (MLPs), Energy transfer (NYSE:ET) And Partners for business products (NYSE:EPD). However, it fares well compared to those high-yield rivals:
|
MLP |
Distribution proceeds |
Distribution coverage ratio |
Leverage ratio |
|---|---|---|---|
|
Energy transfer |
6.7% |
2.0x |
4.0x-4.5x |
|
Partners for business products |
6.4% |
1.7x |
3.0x |
|
MPLX |
7.8% |
1.5x |
3.4x |
Data source: MPLX, Energy Transfer and Enterprise Products Partners. MLP = master limited partnership.
As the table shows, MPLX has a much higher yield. That’s because it has a lower distribution coverage ratio, largely due to its rapid growth in recent years. The company recently increased its distribution by 12.5%, following a 10% increase in 2023 and 2022. That compares with Enterprise Products Partners’ 5% distribution growth over the past year and an annual growth target of 3%- 5% of Energy Transfer.
MLPX has There is much more growth in the pipeline. The company expects to complete the BANGL pipeline expansion next year, while the Blackcomb and Rio Bravo pipelines should come into service in the second half of 2026. The MLP also has a number of natural gas processing plants under construction that should enter commercial operation in the coming years. two years.
In addition to this visible growth, MPLX has sufficient financial capacity to make further acquisitions. It has made two deals this year, including increasing its stake in BANGL. These growth engines should give it the fuel to continue growing its high-yield distribution at a healthy clip. That makes it a great option for those comfortable investing in MLPs that offer their investors a Schedule K-1 federal tax form every year.
Omega Healthcare Investors has done that has quietly been a very enriching investment over the years. The healthcare real estate investment trust (REIT) pays one 6.7% returng dividend, that’s a lot higher than the average REIT (about 4%). Although dividend growth has stalled in recent years (it has not increased the payout since 2019), it has delivered a compound annual dividend growth of 7.1% general since it became public in 2003.
