While many younger investors may shun oil and all fossil fuel-related stocks, the reality is that the electric vehicle future is just that: in the future. Sure there is that family on your block with an EV, but the electric grid is nowhere near capable of handling a 100% electric future. With energy companies out of favor with the current administration, most of them have turned away from production and toward shareholder enhancements.

The Goldman Sachs commodity strategists now expect Brent crude, currently trading near $91 a barrel, to rise to $105 this year. If the geopolitical hotspots (specifically, war in Ukraine) ignite, it could get there fast, and natural gas prices could explode higher as well. President Biden said recently that the  Nord Stream 2 pipeline would not go forward if Russia invades Ukraine, and that could explode natural gas pricing.

With the major energy corporations focused on capital discipline, debt reduction and shareholder returns instead of production, prices are indeed poised to go higher, perhaps much higher. With shares of most major integrated oil companies having shot up in price, we looked for companies that support the infrastructure for oil and natural gas and whose stocks still have room to run.

We found five rated Buy by major Wall Street firms that look like solid plays now. It is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.

Enterprise Products Partners

This is the largest publicly traded energy partnership and a leading North American provider of midstream energy services to producers and consumers. Enterprise Products Partners L.P. (NYSE: EPD) services include gathering, processing, transportation and storage of natural gas, natural gas liquid (NGL) fractionation, import and export terminaling, and offshore production platform services.

One reason many analysts may have a liking for the stock might be its distribution coverage ratio. This ratio is well above 1 times, making it relatively less risky among the master limited partnerships (MLPs).

Enterprise Products Partners stock investors receive a 7.70% distribution. The Mizuho price target for the shares is $30, while the consensus target is $28.81. The stock closed on Tuesday at $24.10.

Magellan Midstream Partners

This top midstream MLP comes with a juicy distribution. Magellan Midstream Partners L.P. (NYSE: MMP) engages in the transportation, storage and distribution of refined petroleum products and crude oil in the United States.

The company operates refined products pipelines that transport gasoline, diesel fuel, aviation fuel, kerosene and heating oil to refiners, wholesalers, retailers, traders, railroads, airlines and regional farm cooperatives, as well as to end markets, including retail gasoline stations, truck stops, farm cooperatives, railroad fueling depots, military bases and commercial airports.

The company also provides pipeline capacity and tank storage services, as well as terminaling, ethanol and biodiesel unloading and loading, additive injection, custom blending, laboratory testing and data services to shippers. In addition, Magellan Midstream Partners owns and operates crude oil pipelines and storage facilities as well as marine terminals located along coastal waterways that provide distribution, storage, blending, inventory management and additive injection services for refiners, marketers, traders and other end users of petroleum products.

Investors receive an 8.53% distribution. Raymond James has a $51 price target, which is less than the $53 consensus target. Magellan Midstream Partners stock ended Tuesday at $48.89 a share.

MPLX

This is the top holding for the Alerian MLP energy exchange-traded fund. MPLX L.P. (NYSE: MPLX) is primarily engaged in crude oil and refined products transportation and terminaling in the U.S. Midwest and Gulf Coast regions, as well as natural gas gathering and processing in the northeast from its prior acquisition of MarkWest Energy in 2015. MPLX was formed by independent U.S. refiner Marathon Petroleum.
The company’s assets include a network of crude oil and refined product pipelines; an inland marine business; light-product terminals; storage caverns; refinery tanks, docks, loading racks and associated piping; and crude and light-product marine terminals. It also owns crude oil and natural gas gathering systems and pipelines, as well as natural gas and NGL processing and fractionation facilities in key U.S. supply basins.

Investors receive an 8.58% distribution. The $43 BofA Securities price target is a Wall Street high. The consensus target for MPLX stock is $36.88, and Tuesday’s closing price was $32.71 a share.

ONEOK

The solid price of natural gas over the past year has helped to lift this top energy company, which is a good idea for investors in search of an energy play. ONEOK Inc. (NYSE: OKE) primarily engages in natural gas transportation, storage and natural gas and NGLs gathering, processing and fractionation in the Bakken, Mid-Continent and Permian. The company recently closed the roll-up of its underlying MLP, ONEOK Partners.

The company has a strong presence in the Oklahoma SCOOP/STACK (NGL gathering/takeaway system, G&P), the Williston Basin (G&P, NGL takeaway) and the Permian Basin (NGL gathering, NGL takeaway, natural gas takeaway), which analysts feel provides high-return growth opportunities.

Many on Wall Street remain very positive on the company’s primarily fee-based earnings, which account for 90% of total earnings.

Investors receive a 5.91% dividend. Raymond James has set a $70 price target on ONEOK stock. The lower consensus target of $66 is closer to Tuesday’s close at $62.73 a share.

This is another top energy company and a solid pick for investors who are more conservative and looking for exposure to liquefied natural gas (LNG). Williams Companies Inc. (NYSE: WMB) operates as an energy infrastructure company primarily in the United States.

Its Transmission & Gulf of Mexico segment comprises Transco and Northwest natural gas pipelines, as well as natural gas gathering and processing, and crude oil production handling and transportation assets in the Gulf Coast region. The Northeast G&P segment engages in the midstream gathering, processing and fractionation activities in the Marcellus Shale region, primarily in Pennsylvania and New York, and the Utica Shale region of eastern Ohio.

The West segment comprises gas gathering, processing and treating operations in the Rocky Mountain region of Colorado and Wyoming, the Barnett Shale region of north-central Texas, the Eagle Ford Shale region of South Texas, the Haynesville Shale region of northwest Louisiana and the Mid-Continent region, which includes the Anadarko, Arkom, and Permian basins. It also includes NGL and natural gas marketing operations, as well as storage facilities.

The company owns and operates 30,000 miles of pipelines, 34 processing facilities, nine fractionation facilities and approximately 23 million barrels of NGL storage capacity.

Shareholders receive a 5.54% dividend. BofA Securities has a $35 price objective. The $31.95 consensus target compares to Tuesday’s $30.41 close for Williams Companies stock.

These five top companies offer reasonably safe and reliable distributions, plus they are major players in the energy infrastructure arena. Those looking for solid total return potential can do well owning these MLP leaders. Note though that MLP distributions may contain return of principal. Those looking to avoid the pesky K-1s can always purchase shares in the ALPS Alerian MLP ETF (NYSEARCA: AMLP). Its investors receive a 1099 instead of a K-1.

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