Here’s why MLP stocks like Energy Transfer, Enterprise Partners are soaring

Top master limited partnership stocks are firing on all cylinders this year, with most of them hovering at their all-time highs, even as the stock market has moved into a correction. Energy Transfer stock jumped to a record high of $19.8, up by 46% from its lowest point last year.

Top MLP stocks have jumped as US indices move into a correction 

Similarly, the Enterprise Products Partners (EPD) stock soared to a record high of $40, up by 52% from the same period. Other top companies in the industry, like Plains All American Pipeline (PAA), Western Midstream (WES), and MPLX, have soared to a record high this year.

The ongoing surge in MLP stock surge is happening at a time when demand for American energy has soared in the past few months as the US-Iran war has escalated. This war has made it more difficult for Middle East crude oil to get to the market and raised demand for American oil.

Brent, the global benchmark, jumped to $115, while the West Texas Intermediate (WTI) soared to $102. The same is happening in the gas industry, where natural gas has jumped sharply because of the supply shortage in the Middle East.

The companies have also done well because of their combination of growth and dividend returns, which are some of the highest in Wall Street. In addition to the stocks doing well, most MLP companies have a dividend yield of over 5%. 

Enterprise Products Partners has a yield of 5.5%, while Energy Transfer yields 6.7%. Plains of America and Western Midstream yield 7.4% and 8.4%, making them highly popular among income-focused investors. This is important as MLPs don't pay an income tax, which helps their investors avoid the double taxation that occurs in other corporations.

There are also signs that these MLP companies are trading at bargain prices despite the soaring energy prices and demand. EPD has a forward price-to-earnings ratio of 13.9, while Energy Transfer has a multiple of 12. 

These numbers are much lower than the S&P 500 Index's 23. They are also lower than that of the iShares US Energy ETF, which has a price-to-earnings of 22.90. That is a sign that these MLP companies are trading at discounts, despite their numerous tailwinds, including the soaring energy demand.

Enterprise Products Partners stock price technical analysis

The daily timeframe chart shows that the EPD stock price has done well since April last year. It has jumped from a low of $25.9 in April last year to a record high of $39.8.

The stock has remained above the 50-day and 100-day Exponential Moving Averages (EMA). It has remain above the Supertrend indicator, a sign that bulls remain in control.

The Relative Strength Index (RSI) and the Percentage Price Oscillator (PPO) have continued rising. 

EPD stock price chart | Source: TradingView 

Therefore, the most likely to continue rising in the coming months as traders target the key resistance level at $50. 

Energy Transfer stock price technical analysis 

The daily chart reveals that the ET stock has jumped from last year's low of $13.57 in April to a record high of $19.67. It recently crossed the important resistance level at $19.30, its highest point in February and March this year.

Energy Transfer has remained above all moving averages. It has remained above the Supertrend and the Ichimoku cloud indicators. Also, the Relative Strength Index and the MACD have continued rising.

ET stock price chart | Source: TradingView 

Therefore, like Enterprise Product Partner stock will likely continue rising as bulls target the key resistance level at $25. A drop below the support at $19.30 will invalidate the bullish outlook.