The Zacks Oil and Gas - Refining & Marketing MLP industry blends stability with income appeal, making it attractive for investors seeking steady returns. These partnerships operate across storage, logistics and fuel distribution, creating multiple revenue streams that help smooth earnings through market cycles. Even in volatile fuel environments, pricing swings can boost margins, offering upside when conditions are uncertain. Demand remains resilient as refined products are essential for transportation, heating and industry. While capital needs are high, the industry’s consistent cash flow profile and disciplined reinvestment strategies support long-term growth. Backed by a strong Zacks Industry Rank in the top tier, the near-term outlook looks encouraging. Valuations also remain reasonable compared to the broader market, adding to the appeal. Within this space, a few names stand out. Global Partners LP (GLP Quick QuoteGLP - Free Report) , Suburban Propane LP (SPH Quick QuoteSPH - Free Report) , and CrossAmerica Partners LP (CAPL Quick QuoteCAPL - Free Report) combine stable operations with growth potential, positioning them well for sustained performance ahead.

Industry Overview

Master limited partnerships (or MLPs) differ from regular stocks since interests in them are referred to as units, and unitholders (not shareholders) are partners in the business. Importantly, these low-risk hybrid entities bring together the tax benefits of a limited partnership with the liquidity of publicly traded securities that earn a stable income. The assets owned by these partnerships are typically oil and natural gas pipelines and storage/infrastructure facilities. The Zacks Oil and Gas - Refining & Marketing MLP industry is a sub-sector of this business model. These firms operate refined product terminals, storage facilities and transportation services. They are involved in selling refined petroleum products (including heating oil, gasoline, residual oil, jet fuel, etc.) and a plethora of non-energy materials (like asphalt, road salt, clay and gypsum).

4 Trends Defining Oil and Gas - Refining & Marketing MLP Industry's Future

Diversified Operations Help Smooth Earnings Across Cycles: Refining and marketing MLPs are not dependent on just one revenue stream. They typically operate across storage, wholesale distribution, logistics and retail fuel networks. When one segment slows, another can offset the weakness. For instance, stronger fuel margins can balance softer volumes, while terminal and logistics assets continue to generate steady throughput-based income. This mix creates a more stable earnings profile over time. It also allows companies to adapt to shifting market conditions rather than being overly exposed to a single driver like commodity prices or demand swings.

Margin Expansion Opportunities During Volatile Fuel Markets: Market volatility, especially in fuel prices, can actually work in favor of refining and marketing players. Rapid price movements often create wider spreads between input costs and selling prices, improving margins. Even when demand is uneven, companies can benefit from favorable pricing dynamics and inventory positioning. Additionally, their ability to source, store and distribute fuels efficiently gives them an edge in capturing these short-term opportunities. This means that, unlike upstream producers, they can sometimes perform better in uncertain markets where price swings are frequent rather than stable.

High Capital Needs and Ongoing Reinvestment Pressure: Refining and marketing MLPs require continuous spending to maintain and expand their asset base. Terminals, storage facilities, and distribution networks need regular upgrades, repairs and capacity additions. On top of that, companies often invest in expanding logistics capabilities or improving efficiency to stay competitive. This means a steady outflow of cash toward maintenance and growth projects. If market conditions weaken, these fixed investment needs don’t go away. As a result, free cash flow can get squeezed, limiting flexibility and potentially affecting distributions to investors over time.

Steady Demand Supported by Essential Energy Consumption Patterns: Demand for refined fuels and related products remains tied to everyday economic activity — transport, heating, and industrial use. Seasonal factors like colder weather can drive spikes in demand, especially for heating fuels, providing a natural boost to volumes. Even when certain regions see weaker consumption, others may offset it, keeping overall demand fairly resilient. This underlying necessity-driven demand makes the business less cyclical than it appears at first glance. Over time, consistent consumption patterns support predictable cash flows, which is a key attraction for income-focused investors in MLP structures.

Zacks Industry Rank Indicates Positive Outlook

The Zacks Oil and Gas – Refining & Marketing MLP is a seven-stock group within the broader Zacks Oil – Energy sector. The industry currently carries a Zacks Industry Rank #24, which places it in the top 10% of 244 Zacks industries.

The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates fairly strong near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

Considering the encouraging dynamics of the industry, we will present a few stocks that you may want to consider for your portfolio. But it’s worth taking a look at the industry’s shareholder returns and current valuation first.

Industry Underperforms S&P 500 & Sector

The Zacks Oil and Gas – Refining & Marketing MLP industry has fared worse than the Zacks S&P 500 composite and the broader Zacks Oil – Energy sector over the past year.

The industry has gained 22.4% over this period compared with the broader sector’s increase of 43.6%. Meanwhile, the S&P 500 has gone up 34.3%.

One-Year Price Performance

Industry's Current Valuation

Since midstream-focused oil and gas partnerships use fixed-rate debt for most of their borrowings, it makes sense to value them based on the EV/EBITDA (enterprise value/ earnings before interest, tax, depreciation and amortization) ratio. This is because the valuation metric takes into account not just equity but also the level of debt. For capital-intensive companies, EV/EBITDA is a better valuation metric because it is not influenced by changing capital structures and ignores the effect of non-cash expenses.

On the basis of the trailing 12-month enterprise value-to-EBITDA (EV/EBITDA), the industry is currently trading at 12.76X, significantly lower than the S&P 500’s 18.66X. It is, however, well above the sector’s trailing 12-month EV/EBITDA of 6.97X.

Over the past five years, the industry has traded as high as 13.33X and as low as 7.65X, with a median of 9.60X, as the chart below shows.

Trailing 12-Month Enterprise Value-to-EBITDA (EV/EBITDA) Ratio (Past Five Years)

 

 

3 Stocks to Buy

CrossAmerica Partners LP: It is a fuel distribution and convenience retail company operating across the United States. CAPL manages both retail fuel stations and a wholesale fuel supply business, focusing on delivering reliable service and value to customers. CrossAmerica Partners works to improve efficiency, benefit from scale, and actively reshapes its portfolio by selling non-core assets and investing in growth opportunities. The Zacks Rank #1 (Strong Buy) firm also expands retail operations at select sites to capture favorable market trends. You can see the complete list of today’s Zacks #1 Rank stocks here.

The business generates steady cash flows supported by fuel sales and merchandise offerings. CrossAmerica Partners follows a disciplined capital approach while maintaining a balanced debt profile. Importantly, CAPL pays regular distributions to unitholders, with stable payouts and healthy coverage, reflecting its focus on consistent returns.

Over the past 60 days, the Zacks Consensus Estimate for CrossAmerica Partners’ 2026 earnings has moved up 7.5%. It has a trailing four-quarter earnings surprise of roughly 9%, on average. CAPL units have declined 13% in a year.

Price and Consensus: CAPL

Global Partners LP: Global Partners is a U.S.-based partnership engaged in the sourcing, storage, distribution, and sale of energy products. It operates a large, integrated network that includes around 1,700 fueling stations, 54 liquid energy terminals, and convenience stores across key regions. Global Partners supplies gasoline, distillates, renewable fuels, and crude oil, serving both wholesale and retail customers through its logistics and marketing capabilities.

Its vertically integrated model supports stable operations and margin growth, while regular acquisitions help expand its footprint. GLP has shown a consistent focus on returning cash to investors, highlighted by a long track record of quarterly distribution increases, making distributions an important part of its overall investor appeal.

The 2026 Zacks Consensus Estimate for Global Partners indicates 44.3% year-over-year earnings per unit growth. The Zacks Rank #2 (Buy) firm has a trailing four-quarter earnings surprise of roughly 310.6%, on average. GLP units have gone down 10.4% in a year.

Price and Consensus: GLP

Suburban Propane Partners, LP: It is one of the largest propane distributors in the United States, with operations dating back to 1928. It serves around one million customers across residential, commercial, industrial and agricultural segments through a wide network of locations nationwide. Suburban Propane Partners primarily focuses on coastal markets and offers both traditional fuels and newer renewable energy solutions, supported by its growing investments in low-carbon alternatives.

Alongside its core propane business, #2 Ranked SPH is expanding into renewable natural gas, hydrogen and blended fuels. Suburban Propane Partners generates steady cash flows and maintains a disciplined financial approach, enabling consistent distributions to unitholders with stable coverage levels over time.

The fiscal 2026 Zacks Consensus Estimate for Suburban Propane Partners indicates 17.7% year-over-year earnings per unit growth. It has a trailing four-quarter earnings surprise of roughly 310.6%, on average. SPH units have gone down 5.9% in a year.

Price and Consensus: SPH