Plains All American Pipeline LP

Plains All American Pipeline reported second-quarter 2026 revenue of US$17.69 billion and net income of US$1.83 billion, exceeding analyst expectations and reaffirming full-year guidance. Management credited cost efficiencies and Cactus III pipeline synergies for the earnings strength, while the sale of the Canadian NGL business reduced leverage and freed up capital. The company increased its 2026 growth capital toward Permian gathering and a 75,000 barrel per day Cactus III expansion, funded in part by the Canadian NGL sale. This reinforces the investment case around higher-return crude projects and export connectivity, though it also amplifies risk from a more concentrated crude footprint if Permian activity softens.

Plains All American Pipeline shares have risen 36% year to date, outperforming the S&P Energy Sector Index's 31.4% gain, as West Texas Intermediate crude prices jumped 49%. The midstream operator raised its 2026 capital spending forecast to between $400 million and $450 million, up from a prior estimate of $350 million, citing strength in its Canadian and Permian Basin operations. The company offers a 6.8% dividend yield and has more than doubled its trailing-12-month payout over the past five years. It also raised $3.3 billion from the May sale of its Canadian midstream business to reduce leverage and improve dividend coverage. CEO Willie Chiang noted that tight global crude supplies are boosting demand for North American oil and the company's transportation and storage services.

Plains All American Pipeline has raised its 2025 capital spending guidance to between $400 million and $450 million, up from a previous estimate of $350 million, as it pursues multiple growth projects across its Permian long-haul, Canadian gathering, and Permian gathering businesses. The company affirmed its commitment to these projects on June 15, while maintenance capital is expected to remain at $185 million. The increased spending aims to capitalize on strong demand for North American hydrocarbons amid tightening global crude oil supply, with a portion directed toward expanding the Permian system to accommodate additional gathering volumes in the New Mexico Delaware Basin. Plains All American Pipeline expects the projects to generate higher returns and contribute to its EBITDA profile in 2027.

UBS restated its Buy rating and $25 price target for Plains All American Pipeline on June 16, following the company's disclosure of enhanced capital expenditure for 2026. Plains All American estimates growth capital spending will increase to $400 million to $450 million net to PAA this year, up from around $350 million. The additional budget is driven by expansion plans in the company's Permian long-haul, Canadian gathering, and Permian gathering operations. UBS noted that the global oil setting has strengthened since the start of the year, enabling the company to advance many high-return projects, and sees the increased growth capital as a positive that will drive incremental profitability at a competitive rate of return.

The Alerian MLP ETF, trading under the ticker AMLP, is delivering a 7.79% yield and a 15.3% one-year return, nearly doubling Shell's 4.08% dividend yield. The ETF's $14.1 billion portfolio consists of 15 midstream Master Limited Partnerships that earn fixed fees per barrel for transporting and storing oil and gas, insulating revenues from commodity price swings. Top holdings include Plains All-American Pipeline, Western Midstream Partners, and Sunoco, each representing over 13% of assets. AMLP collects partnership revenues into a C-Corp structure, issuing 1099 forms to shareholders instead of K-1s for simpler tax filing. The fund has returned 13% year-to-date and 19.66% over three years, with an expense ratio of 1.01%.

Plains All American Pipeline appears better positioned than Energy Transfer to deliver stronger returns, according to a Zacks Investment Research analysis. Plains All American Pipeline's return on equity stands at 12.17% versus Energy Transfer's 9.77%, and its debt-to-capital ratio is lower at 47.02% compared with 58.23% for Energy Transfer. Plains All American Pipeline's 2027 earnings estimates have risen 2.48% over the past 60 days, while Energy Transfer's 2027 estimates have fallen 4.4%. Plains All American Pipeline units have gained 20.7% in the past six months, outpacing Energy Transfer's 15.5% rally, and its cash distribution yield is 7.83% with five-year annualized distribution growth of 20.92%, slightly above Energy Transfer's 7.2% yield and 19% growth. Both stocks carry a Zacks Rank #3 (Hold).