Key Points
Energy Transfer and MPLX are well-insulated from volatile oil and gas prices.
They can easily cover their big distributions with their cash flow.
September is typically a weak month for stocks. It's the only calendar month with a negative historical average return for the S&P 500 (SNPINDEX: ^GSPC), mainly due to a mix of seasonal portfolio rebalancing moves, negative media coverage, and the Fed's interest rate decision.
But for long-term investors who can tune out near-term noise, September is generally a good time to buy stocks. I think it's still a great time to buy a few income-generating energy stocks that have a history of resisting market downturns while paying stable yields. Let's take a look at two of those stocks that could easily turn a $10,000 investment into more than $600 in annual income: Energy Transfer (NYSE: ET) and MPLX (NYSE: MPLX).
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The similarities between Energy Transfer and MPLX
Energy Transfer and MPLX are both midstream pipeline companies that charge upstream producers and downstream refiners "tolls" for using their infrastructure. That "toll road" model is well insulated from volatile commodity prices, since it only needs the resources to keep flowing through its pipes to generate stable cash flow.
Energy Transfer and MPLX are both master limited partnerships (MLPs) instead of traditional C corporations. MLPs are pass-through entities that don't pay corporate taxes, whereas corporations must pay corporate taxes on their profits and dividends.
MLPs blend their own income with a return of capital in their distributions, which defers an investor's tax obligation until the investment is sold. But for every year you hold an MLP, you'll need to file a separate K-1 form with the IRS to report those tax-deferred distributions.
The differences between Energy Transfer and MPLX
Energy Transfer operates more than 140,000 miles of pipeline across 44 states. MPLX, which was spun off from Marathon Petroleum (NYSE: MPC) in 2012, operates over 10,000 miles of crude oil and light product pipelines across 14 states.
Energy Transfer has a massive footprint across all major U.S. basins and transports natural gas, liquefied natural gas (LNG), natural gas liquids (NGLs), crude oil, and other refined products. It also helps companies export some of their natural gas products. MPLX's smaller network is concentrated in the Appalachian and Permian Basins and mainly transports crude oil, refined petroleum products, natural gas, and NGLs associated with Marathon Petroleum's operations.
Energy Transfer is more of a play on the surging demand for natural gas and NGLs, especially among power-hungry data centers. MPLX is a more diversified play on refinery supply chains, fuel distribution logistics, and natural gas production in the Appalachian region.
Both companies pay attractive distributions
Energy Transfer and MPLX pay forward yields of 6.4% and 7.3%, respectively. Those high distributions are easily supported by their distributable cash flow (DCF). In 2025, Energy Transfer's adjusted annualized DCF of $8.2 billion comfortable covered its $4.6 billion in distributions. MPLX's $5.8 billion in annualized DCF also covered its $4.1 billion in distributions.
Energy Transfer plans to raise its distributions by 3%-5% annually. MPLX plans to grow its distributions more aggressively, at about 12.5% annually through 2027.
Both stocks are cheaply valued
Energy Transfer and MPLX are trading at just 18 times and 12 times last year's earnings per unit (EPU), respectively, making them cheaper than many other energy stocks. Energy Transfer is trading at a higher multiple because it's more exposed to the AI and cloud markets.
So while the war in Iran and other geopolitical conflicts might rattle other energy stocks this month, Energy Transfer and MPLX remain reliable income plays in a wobbly market. They're not exciting investments, but they'll help you forget all about the so-called "September Effect".
Leo Sun has positions in Energy Transfer. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.