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The investing public has begun to realize that AI will require a massive buildout of data centers, and those centers will require vast amounts of energy to power their services and keep them cool. For example, a Chat-GPT query requires almost 10 times the power of a Google search.

Energy midstream companies provide the gathering, processing, transport, and storage of crude oil, natural gas, and natural gas liquids (NGLs) between the wellhead and the end user. Because small modular reactors are a decade or more away, tech companies building AI infrastructure will require clean natural gas to power their data centers. Energy infrastructure is known for its attractive income backed by fee-based businesses with stable cash flows, and dividend growth is a key priority for many companies.

Energy midstream stocks, both master limited partnerships (MLPs) and corporations, are viewed as income investments. They typically pay solid dividends with attractive yields. They also provide excellent total return potential, driven by growing dividends. As dividends increase, the share price must go up to keep the yield steady. When investors see increasing dividends, they often bid up share prices faster than the dividend growth rate.

For example, over the last year, the shares of the InfraCap MLP ETF (AMZA) appreciated by 28.7%, giving a total return of 39.1%. Recently, ETF Trends provided this table of forecast dividend growth for selected midstream companies:

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