Western Midstream Partners

WES

Market cap $17.2B

Western Midstream (WES) closed at $40.39 in the latest trading session, marking a +1.94% move from the prior day.

These yields look risky at first glance. However, the market is missing important details. These are rare setups that could deliver income and upside at the same time.

The year is 2026, and the market (and macro) environment seem to be exactly the opposite of what is required for stress-free income. For prudent income investors, considering taking some risk off the table might be a good idea. But in most cases it comes at the cost of reduced income potential.

Western Midstream and MPLX both have high yields, with distributions that are well covered and solid balance sheets. Western has a nice growth opportunity by expanding into the produced water business.

Western Midstream Partners earns a Strong Buy rating, driven by a 9% yield, discounted valuation, and resilient, fee-based revenues. WES' strategic pivot to water handling in the Delaware Basin, bolstered by the Aris acquisition, positions it for robust growth and higher distribution coverage. Long-term contracts with minimum volume commitments, especially with OXY through 2035, underpin predictable cash flows and mitigate downside risk.

Western Midstream has been flat for almost 2 years. Meanwhile, its business profile has improved, and distributions have become even more attractive. Currently, WES offers ~9.2% yield, which is underpinned by resilient fundamentals and, importantly, decent growth (the market also agrees with this). In the article I detail why WES is a clear buy for durable income-focused investors.

Western Midstream earns a reiterated Buy rating, offering a 9.2% forward yield and trading at a 27% discount to fair value. WES's growth profile remains intact, driven by Pathfinder Pipeline improvements, North Loving II expansion, and $40 million in Aris Water Solutions synergies. The company maintains a strong investment-grade balance sheet with a 3x leverage ratio and robust free cash flow after capex and distributions.

Energy Transfer is a great combination of growth and yield. Western Midstream has one of the highest yields in the energy space, but comes with a strong balance sheet.

Starwood has maintained its lucrative dividend for more than a decade. Western Midstream aims to steadily increase its big-time distribution payment.

Bloomberg's 2026 Dividend Focus list highlights 14 ‘safer' stocks with free cash flow yields exceeding dividend yields, signaling potential buy opportunities. Top projected net gainers for 2026 include Marvell Technology (MRVL), Nike (NKE), and PT Telekom Indonesia (TLK), with analyst-estimated gains up to 37.98%. Four ‘IDEAL' stocks—Aviva, Sodexo, Danske Bank, and Western Midstream—offer dividends from $1,000 invested greater than their share price, meeting the dogcatcher ‘watch to buy' threshold.