3 Midstream Dividend ETFs Yielding Over 5% That Are Also Beating the Market

"Midstream dividend ETFs are an underrated way to derive income from the stock market, mainly because Wall Street is still overlooking them. ETFs like the Alerian MLP ETF (NYSEARCA:AMLP), USCF Midstream Energy Income Fund (NYSEARCA:UMI), and Global X MLP ETF (NYSEARCA:MLP) have outperformed most classic income vehicles, and have sometimes done so with double the yield. Midstream energy companies include pipeline operators and storage facility owners that transport oil and natural gas from production sites to refineries and end users."

"These companies are not exposed to the day-to-day swings of energy prices and instead operate on volume-based fees. This business model has allowed them to maintain generous dividend payments even during volatile energy markets while still delivering returns that have outpaced broader indexes. North American midstream companies are becoming very successful post-2022 as the U.S. has turned into Europe's largest source of energy. There's plenty of oil flowing through pipelines, and the demand is sticky."

"The following three midstream dividend ETFs are exactly why this sector deserves a closer look from income-focused investors. Alerian MLP ETF (AMLP) The Alerian MLP ETF pays the highest yield among major midstream ETFs and is one of the largest funds in the sector. It is a capped, float-adjusted, capitalization-weighted index of energy infrastructure Master Limited Partnerships. These companies get most of their cash flow from midstream businesses."

Midstream dividend ETFs deliver outsized income by investing in pipelines, storage, and energy infrastructure that generate fee-based cash flow. Funds such as AMLP, UMI, and MLP have outperformed many traditional income vehicles and at times offered roughly double the yield. Midstream companies earn volume-based fees for transporting oil and natural gas and are less exposed to daily commodity price swings. That business model supports sustained, generous dividends and has enabled returns to beat broader indexes. Post-2022 North American midstream has strengthened as U.S. exports to Europe increased, creating steady pipeline volumes and durable demand. AMLP stands out for high yield but carries a higher expense ratio.

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