How attractive is MPLX's 8.4% dividend?

This midstream energy company MPLX recently did something—its quarterly dividend increased by 12.5%. What does that mean? The current yield skyrockets to 8.4%, surpassing the S&P 500's 1.1%.

**Data speaks:**
- Adjusted EBITDA for Q3 approached $1.7 billion, up 3% year-over-year
- Year-to-date cumulative EBITDA reached $5.2 billion, up 4.2%
- Distributable cash flow hit $1.5 billion, with a payout coverage ratio of 1.3x
- Leverage ratio is 3.7x, well below the manageable threshold of 4.0x

**Why can dividend payouts keep increasing?**

MPLX now holds a bunch of projects: two natural gas processing plants under construction (to be operational in 2025-2026), multiple pipeline expansions, and a new liquefied natural gas export terminal... The CEO clearly stated—mid-term annual EBITDA growth is expected to be in the single digits.

This year, they also made some acquisitions: $2.4 billion for Northwind midstream assets, and $715 million to buy back 55% of BANGL pipelines. These will contribute solid cash flow in the coming years.

For high-dividend enthusiasts, this is a typical cash flow machine—assets generate stable income, giving the company the confidence to keep increasing dividends. The only caveat is that it’s an MLP structure, requiring annual K-1 tax forms, making tax handling more complex.