Artificial intelligence has turbocharged electricity demand, and most investors are focused on chips, data centers, and utilities as the obvious beneficiaries of that surge.
But one often-overlooked sector sits one step behind the power companies and keeps delivering strong income regardless of which AI stocks are winning the headlines.
Midstream energy companies like Enterprise Products Partners (NYSE: EPD), Enbridge (NYSE: ENB), and Energy Transfer (NYSE: ET) own the pipelines and infrastructure that move oil and natural gas across the country and around the world.
These businesses largely charge fees for the use of their assets, meaning the volumes they transport matter far more than the underlying commodity prices themselves.
Energy demand in the United States is expected to increase by 60% between 2025 and 2045, compared to just 10% growth recorded between 2005 and 2025.
Natural gas, which is most efficiently moved by pipeline, is increasingly being relied upon to generate the electricity that powers data centers and AI infrastructure globally.
That dynamic means higher electricity demand translates directly into higher natural gas volumes flowing through pipelines owned by these three midstream giants.
Enterprise Products Partners is considered a bellwether name in the sector, offering a 5.7% yield and an impressive 28-year streak of annual distribution increases.
The master limited partnership has delivered slow and steady distribution growth in the low single digits, making it a likely fit for conservative investors seeking reliable income.
Enbridge, the Canada-based pipeline operator, carries a 5.8% yield and a 31-year dividend streak measured in Canadian dollars, meaning U.S. investors will see payouts fluctuate with exchange rates.
Unlike Enterprise and Energy Transfer, Enbridge is not structured as an MLP, which means investors avoid the K-1 tax form and can hold shares comfortably inside a tax-advantaged retirement account like an IRA.
Enbridge also brings a more diversified portfolio to the table, including regulated natural gas utilities and a small clean energy business alongside its core pipeline operations.
Energy Transfer rounds out the group with the highest yield at 6.3%, making it an attractive option for investors focused on maximizing portfolio income above all else.
The company did cut its distribution in half during the COVID pandemic to strengthen its balance sheet, though that task has since been completed and distributions are growing again.
Energy Transfer’s distribution now sits above its pre-cut level and remains well covered by distributable cash flow, though more risk-tolerant investors are best suited to take a closer look.
All three companies effectively serve as picks-and-shovels plays in the AI buildout, supporting the power companies that support AI rather than directly supplying the technology sector themselves.
For dividend investors searching for high yields with infrastructure-backed cash flows, Enterprise Products Partners, Enbridge, and Energy Transfer each deserve serious consideration as electricity demand continues its steep climb.
