Key Takeaways
- MPLX expects to raise its distribution 12.5% in both 2026 and 2027, while Energy Transfer targets raises of 3% to 5% a year.
- MPLX’s bigger, faster-growing payout is set against Energy Transfer’s much wider cash cushion.
- Energy Transfer’s distributable cash flow covers its distribution 1.8x for fiscal 2025 and 2.1x on fiscal 2026 consensus, against 1.4x and 1.3x for MPLX.
- MPLX targets 1.3x coverage for 2026, 2027 and beyond, so its next two quarterly reports are the ones to watch.
MPLX (MPLX) told investors on Aug. 4 that it expects to raise its distribution 12.5% in both 2026 and 2027. Energy Transfer (ET) reported the same day. Its distributable cash flow was up 32% from a year earlier, and it’s sticking to raises of 3% to 5% a year.
MPLX offers the bigger, faster-growing check, at a 7.65% yield. Energy Transfer yields 6.8% and has far more cash behind its payout. (Both are MLPs, so they pay distributions on units and send a K-1 at tax time.)
So which is the better high-yield dividend stock?
| Metric | Energy Transfer (ET) | MPLX (MPLX) |
|---|---|---|
| Dividend yield | 6.8% | 7.65% (at the current rate) |
| Distribution growth, fiscal 2020 to fiscal 2025 | 7.8% a year | 8.2% a year |
| Distributable cash flow coverage, fiscal 2025 | 1.78x | 1.40x |
| Distributable cash flow coverage, fiscal 2026 consensus | 2.11x | 1.29x |
| Net debt/EBITDA (LTM) | 3.98x | 4.0x |
| Interest coverage (LTM) | 3.01x | 4.09x |
| Price/distributable cash flow, fiscal 2026 consensus | 7.2x | 9.6x |
Energy Transfer has cash to spare
Energy Transfer’s business is growing fast. Distributable cash flow attributable to partners rose 32% to $2.59 billion in the second quarter of 2026, from $1.96 billion a year earlier.
Consensus has distributable cash flow per unit rising to $2.89 in fiscal 2026, from $2.38 in fiscal 2025. That would lift coverage from a comfortable 1.78x to a very wide 2.11x.
The distribution has a rougher history. It fell from $1.22 a unit in fiscal 2019 to $0.63 in fiscal 2021, and it reached $1.34 in fiscal 2025. Coverage has held at 1.78x or better every year since fiscal 2018…
That cut is why the 7.8% five-year rate, which starts from $0.92 in fiscal 2020, overstates the pace now. The distribution rose 4.7% in fiscal 2025, inside the target CEO Thomas Long set out: “targeting a long-term annual distribution growth rate of 3% to 5% and maintaining our leverage targets of 4 to 4.5x EBITDA.”
The main risk is the spending: $5.6 billion to $5.9 billion of growth capital planned for 2026, on interest coverage of 3.01x. On Oct. 6 it also agreed to buy Vaquero Midstream for about $2.6 billion in cash and units, a deal it expects to add to distributable cash flow per unit right away.
MPLX is raising faster on a thinner cushion
Where Energy Transfer holds its raises to 3% to 5%, MPLX raised its quarterly distribution 12.5% in each of the last two years, and distributions per unit rose 12.7% in fiscal 2025, to $4.07. This year’s raise is guided, not declared yet: last year’s came on Oct. 28.
The business is growing more slowly. Second-quarter distributable cash flow was $1.45 billion, against $1.42 billion a year earlier. Management expects mid-single-digit adjusted EBITDA growth in 2026, weighted to the second half.
Raises that outrun cash flow narrow coverage. Consensus has fiscal 2026 distributable cash flow per unit at $5.86, against distributions of $4.55, so coverage slips from 1.40x to a thinner 1.29x. MPLX is doing this on purpose. CFO Carl Hagedorn said the company will “continue to target our 1.3x coverage ratio for both ’26 and ’27 and frankly, beyond.”
That’s close to where MPLX has run all along. Coverage stayed between 1.35x and 1.68x in every fiscal year from 2016 to 2025, while distributions per unit nearly doubled from $2.05 to $4.07.
MPLX just raised its 2026 growth capital outlook by $500 million, to $2.9 billion. At 1.3x coverage, a project that runs late leaves less room for 12.5% raises.
So which dividend wins?
MPLX is the better high-yield dividend stock. It pays the bigger check today and is raising it faster.
At each dividend’s pace now, $10,000 would pay about $2,251 a year from MPLX in year 10, against about $1,027 from Energy Transfer. Even at their five-year rates, it’s about $1,549 against $1,338: a 15.5% yield on the $10,000, against 13.4%. Energy Transfer’s income never catches up.
What decides it is the record behind that check. MPLX’s distribution has been covered at least 1.35x in every fiscal year since 2016, and it covers its interest 4.09x. Energy Transfer covers its interest 3.01x, and its distribution fell from $1.22 to $0.63 between fiscal 2019 and fiscal 2021.
Energy Transfer’s case is strong. Its cash flow is growing much faster, and its 2.11x forward coverage is far wider than MPLX’s 1.29x. It trades at 7.2x fiscal 2026 distributable cash flow, against 9.6x for MPLX. It’s just that a high-yield investor is buying the check, and MPLX’s is bigger, growing faster and has been covered every year for a decade.
Of course, MPLX is counting on second-half EBITDA growth to hold coverage at 1.3x through its 2027 raise. That makes its third- and fourth-quarter results the ones to watch.
So what is MPLX stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
