3 High-Yield Energy Stocks to Buy in September

The Alerian MLP Index has returned more than 25% in 2026, yet the article argues Energy Transfer, Enterprise Products Partners, and Western Midstream remain attractive on high yields, growth capex, and valuations. Energy Transfer yields 6.3%, trades at 8.5x estimated 2026 EV/EBITDA, and plans up to $5.9B of growth capex tied to rising natural-gas demand from AI data centers and LNG exports. Enterprise yields 5.8% and expects double-digit EBITDA and distributable-cash-flow growth in 2027, while Western Midstream offers a 7.5% yield, roughly 3x leverage, and targets 4%-5% annual EBITDA growth.

Analysis

The relevant question is not whether midstream cash yields remain attractive, but whether incremental gas/NGL volumes convert into fee-based EBITDA without a matching increase in leverage or equity issuance. ET offers the highest operational torque to Gulf Coast gas and export infrastructure, so successful project commissioning can narrow its discount to EPD; its complexity, however, means cost overruns, permitting delays, or weaker contract quality would prevent that rerating. EPD should command a lower-beta premium because its diversified franchise and balance-sheet discipline make it the cleaner vehicle for institutions seeking durable income rather than maximum growth sensitivity.

WES is the more concentrated Delaware Basin expression. Its water-handling footprint creates an underappreciated second-order benefit as produced-water volumes rise with basin maturity, but concentration also makes it more vulnerable than ET or EPD to a single-basin drilling slowdown, producer consolidation, or tighter disposal-well regulation. The high distribution yield is therefore partly compensation for asset and customer concentration, not simply a mispricing.

Over the next 1-3 months, the principal catalyst is evidence that gas takeaway, LNG feedgas demand, and Permian associated-gas volumes are tightening capacity rather than merely improving sentiment. Over 6-18 months, the key determinant is project returns versus the cost of capital: midstream multiples can expand if new assets enter service on schedule and distribution coverage improves, but compress quickly if capex rises faster than cash flow. Consensus may be underweight regulatory and construction risk while over-extrapolating AI-related power demand; data-center load does not translate directly into pipeline demand until generation, interconnection, and LNG capacity are operational.

Key Decisions for Investors

• Initiate a 6-12 month long ET / short EPD pair only if ET's valuation discount remains materially wider than its historical spread after the next earnings release. Target a 10-15% relative return from execution-driven multiple convergence; exit if ET raises growth spending without reaffirming leverage and distribution-coverage targets, or if project-service dates slip.
• For a lower-volatility income allocation, accumulate EPD on broad energy-sector pullbacks rather than chase yield compression. The thesis is durable cash-flow compounding and downside resilience; reassess if management funds growth with material equity issuance or if NGL export/processing margins weaken enough to reduce forward distributable cash flow guidance.
• Treat WES as a sized satellite position, not a core midstream substitute: limit exposure ahead of quarterly producer-capex updates and Delaware Basin disposal-rule developments. A 4-6% distribution increase with stable leverage supports the yield thesis; a slowdown in basin volumes or adverse water-disposal regulation would warrant exiting even if the headline yield rises.
• Set a sector alert around LNG project delays, Henry Hub basis widening, and Permian producer capital-budget cuts. Those signals would challenge the volume-growth premise before reported midstream EBITDA deteriorates and would favor reducing ET/WES relative to EPD.