Plains All American Pipeline

PAA

Market cap $11.2B

The chances for a notable correction are certainly not low. Going into richly priced and growth-focused names might not be the smartest idea. Yet, sitting on sidelines might come with some serious opportunity costs.

HOUSTON, Oct. 02, 2025 (GLOBE NEWSWIRE) -- Plains All American Pipeline, L.P. (Nasdaq: PAA) and Plains GP Holdings (Nasdaq: PAGP) announced today their quarterly distributions with respect to the third quarter of 2025 and also announced timing of third quarter 2025 earnings.

PAA and ET, with their widespread pipeline across the United States, are providing efficient services to their customers.

Interest rate cuts make high-yield dividend stocks more attractive because they reduce competition from fixed-income investments while lowering the companies' borrowing costs, which can support both dividend sustainability and stock price appreciation.

The current economic environment is marked by persistent inflation and a weakening labor market, raising uncertainty and risk for investors. Despite these risks, large-cap equities, tech stocks, and high-yield credit continue to climb, defying expectations of repricing. Income-focused assets like real estate, financials, dividend growth (SCHD), and quality CEFs (UTG, PDI) now offer lower yields as well.

Midstream energy firms offer attractive income investments, with business models and financial structures impacting growth, valuation, and yield opportunities. MLPs like EPD and MPLX are discounted versus corporations, offering higher yields but facing investor aversion due to K-1 tax forms. Strong performers such as Enterprise Products Partners (EPD) and MPLX demonstrate sensible growth, rising dividends, and robust balance sheets.

Plains All American Pipeline (PAA) offers a compelling long-term opportunity with an 8.7% yield, strong dividend growth, and discounted valuation. PAA's sale of its Canadian NGL business will reduce volatility, improve focus on oil midstream, and fund debt reduction and strategic acquisitions. Expected annual compound total returns for PAA are 26–27% over five years, driven by dividend yield, earnings growth, and valuation expansion.

Midstream energy stocks are the companies involved in the processing, transportation, and storage of crude oil, natural gas, and natural gas liquids.

Plains All American offers a high 8.7% yield, a strong balance sheet, and trades at a compelling valuation in an overheated market. PAA's strategic focus on crude oil logistics, robust EBITDA growth, and recent bolt-on acquisitions enhance its long-term growth prospects. The sale of NGL assets and redeployment of proceeds into core crude infrastructure strengthens PAA's position and supports future distribution growth.

Plains All American Pipeline has shifted to a nearly 100% oil focus after divesting Canadian NGL assets and acquiring a majority stake in EPIC Crude. PAA sold assets at lower valuations and bought at higher ones, increasing Permian Basin concentration and risk. Despite strong distribution coverage and likely dividend growth, management's guidance relies on optimistic oil price assumptions.