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Refining & Marketing MLP Industry Shines: 3 Stocks to Watch
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The Zacks Oil and Gas - Refining & Marketing MLP industrylooks well placed, supported by diversified business models, stronger balance sheets and improving earnings expectations. These partnerships operate across terminals, storage, transportation, wholesale distribution and retail fuel markets, helping steady cash flows through changing conditions. The industry also benefits from disciplined capital spending and long-term contracted projects that improve visibility, while volatility in refined-product markets can create margin opportunities for flexible operators. Risks remain, including inflation, higher inventory-carrying costs and softer consumer demand. Even so, the group’s strong Zacks Industry Rank, upward earnings revisions and market outperformance point to a favorable near-term backdrop. Western Midstream Partners LP (WES - Free Report) stands out for fee-based infrastructure and growth projects, Global Partners LP (GLP - Free Report) for its integrated retail and terminal network and NGL Energy Partners LP (NGL - Free Report) for its expanding water, crude-oil and liquids logistics platform.
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).
3 Trends Defining Oil and Gas - Refining & Marketing MLP Industry's Future
Integrated Business Models Support More Stable Cash Flows: Refining and marketing MLPs can benefit from operating across several parts of the fuel value chain, including storage, terminals, wholesale distribution, logistics and retail sales. This diversification helps reduce dependence on any single market or product. When one area faces weaker conditions, another may offset some of the pressure. Contracted volumes, fee-based activities and recurring retail demand can also provide a steadier cash-flow base. This gives well-positioned partnerships more flexibility to fund distributions, manage debt and invest through different market cycles, making the business model more resilient than a pure commodity-price exposure.
Stronger Balance Sheets Can Support Growth and Unitholder Returns: Many energy MLPs are placing greater emphasis on leverage control, disciplined capital spending and stronger liquidity. This matters because a healthier balance sheet can lower financing risk and give partnerships more room to pursue acquisitions, expand infrastructure or increase cash distributions. Recent industry trends also show continued interest in growth projects backed by long-term commitments, which can improve the visibility of future cash flows. At the same time, management teams remain selective about new investments, focusing on projects that offer attractive returns. This combination of financial discipline and targeted expansion can strengthen the long-term investment case for the industry.
Inflation, Inventory Costs and Demand Pressure Remain Key Risks: The industry still faces several macro risks. Higher fuel prices and inflation can pressure consumers, leading to smaller fill-ups, lower-grade fuel choices or softer store traffic. At the same time, steep backwardation in refined-product markets can raise the cost of carrying hedged inventory, reducing the benefit of favorable selling margins. Geopolitical events can further increase price swings and complicate inventory management. These pressures may not always cause a sharp drop in demand, but they can make earnings less predictable. If weaker consumer spending combines with elevated financing and operating costs, refining and marketing MLP profitability could come under pressure.
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 #40, which places it in the top 16% of 247 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.
The industry’s position in the top 50% of the Zacks-ranked industries is a result of improving earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are becoming optimistic about this group’s earnings growth potential. As a matter of fact, the industry’s earnings estimates for 2026 have gone up nearly 22.6% in the past year.
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 Outperforms S&P 500 & Sector
The Zacks Oil and Gas – Refining & Marketing MLP industry has fared better than the Zacks S&P 500 composite and the broader Zacks Oil – Energy sector over the past year.
The industry has gained 46.2% over this period compared with the broader sector’s increase of 30.8%. Meanwhile, the S&P 500 has gone up 16.2%.
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 12.25X, significantly lower than the S&P 500’s 18.02X. It is, however, well above the sector’s trailing 12-month EV/EBITDA of 5.96X.
Over the past five years, the industry has traded as high as 13.33X and as low as 7.65X, with a median of 10.13X, as the chart below shows.
Trailing 12-Month Enterprise Value-to-EBITDA (EV/EBITDA) Ratio (Past Five Years)
3 Stocks to Focus On
Western Midstream Partners LP: Western Midstream Partners provides natural gas, crude oil, NGL and produced-water services across major U.S. producing basins. The Zacks Rank #1 (Strong Buy) firm operates gathering, processing, treating, storage, pipeline and water infrastructure, with a particularly strong position in the Delaware Basin. Its network helps producers move hydrocarbons and manage water efficiently. You can see the complete list of today’s Zacks #1 Rank stocks here.
Western Midstream Partners also benefits from mostly fee-based contracts, long-term commitments and acreage dedications that support cash-flow stability. Growth projects such as North Loving II and the Pathfinder Pipeline are expected to expand capacity. The partnership also maintains investment-grade credit ratings and focuses on disciplined growth, leverage management and steady distributions to unitholders.
The 2026 Zacks Consensus Estimate for Western Midstream Partners indicates 22.8% year-over-year earnings per unit growth. Over the past 60 days, the Zacks Consensus Estimate for its 2026 earnings has moved up 4.6%.WES units have moved up 17.8% in a year.
Price and Consensus: WES
Global Partners LP: Global Partners is a diversified energy distribution and retail company with operations spanning terminals, wholesale fuel supply, gasoline stations and convenience stores. The partnership owns, leases or supplies about 1,600 fueling locations and operates liquid-energy terminals from Maine to Florida and into the Gulf States. Its business links sourcing, storage, distribution and retail sales.
Global Partners LP also serves commercial, industrial and government customers with fuels and related services. Its integrated model helps capture product margins across several parts of the value chain. The partnership continues to grow through acquisitions, retail development and market expansion while offering renewable fuels and expanding EV charging access.
The 2026 Zacks Consensus Estimate for Global Partners indicates 165.6% year-over-year earnings per unit growth. The Zacks Rank #2 (Buy) operator has a trailing four-quarter earnings surprise of roughly 115.3%, on average. GLP units have gone up 4.7% in a year.
Price and Consensus: GLP
NGL Energy Partners LP: NGL Energy Partners operates through Water Solutions, Crude Oil Logistics and Liquids Logistics, with its largest business centered on produced-water handling. The Zacks Rank #3 (Hold) firm owns an extensive Delaware Basin water network that includes large-diameter pipelines, disposal facilities, recycling capabilities and long-haul transportation infrastructure. The system serves upstream producers under long-term, fixed-fee contracts backed by acreage dedications and volume commitments.
NGL Energy Partners LP also moves crude oil through storage, terminals and the Grand Mesa Pipeline, while its liquids business supplies propane, butane and related products across the United States and Canada. Its broad logistics footprint supports customers across several energy markets.
The fiscal 2027 Zacks Consensus Estimate for NGL Energy Partners indicates 360.4% year-over-year earnings per unit growth. It has a market capitalization of nearly $2 billion. NGL units have surged 155.8% in a year.
View the Zacks #1 Rank List
Image: Bigstock
Refining & Marketing MLP Industry Shines: 3 Stocks to Watch
The Zacks Oil and Gas - Refining & Marketing MLP industrylooks well placed, supported by diversified business models, stronger balance sheets and improving earnings expectations. These partnerships operate across terminals, storage, transportation, wholesale distribution and retail fuel markets, helping steady cash flows through changing conditions. The industry also benefits from disciplined capital spending and long-term contracted projects that improve visibility, while volatility in refined-product markets can create margin opportunities for flexible operators. Risks remain, including inflation, higher inventory-carrying costs and softer consumer demand. Even so, the group’s strong Zacks Industry Rank, upward earnings revisions and market outperformance point to a favorable near-term backdrop. Western Midstream Partners LP (WES - Free Report) stands out for fee-based infrastructure and growth projects, Global Partners LP (GLP - Free Report) for its integrated retail and terminal network and NGL Energy Partners LP (NGL - Free Report) for its expanding water, crude-oil and liquids logistics platform.
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).
3 Trends Defining Oil and Gas - Refining & Marketing MLP Industry's Future
Integrated Business Models Support More Stable Cash Flows: Refining and marketing MLPs can benefit from operating across several parts of the fuel value chain, including storage, terminals, wholesale distribution, logistics and retail sales. This diversification helps reduce dependence on any single market or product. When one area faces weaker conditions, another may offset some of the pressure. Contracted volumes, fee-based activities and recurring retail demand can also provide a steadier cash-flow base. This gives well-positioned partnerships more flexibility to fund distributions, manage debt and invest through different market cycles, making the business model more resilient than a pure commodity-price exposure.
Stronger Balance Sheets Can Support Growth and Unitholder Returns: Many energy MLPs are placing greater emphasis on leverage control, disciplined capital spending and stronger liquidity. This matters because a healthier balance sheet can lower financing risk and give partnerships more room to pursue acquisitions, expand infrastructure or increase cash distributions. Recent industry trends also show continued interest in growth projects backed by long-term commitments, which can improve the visibility of future cash flows. At the same time, management teams remain selective about new investments, focusing on projects that offer attractive returns. This combination of financial discipline and targeted expansion can strengthen the long-term investment case for the industry.
Inflation, Inventory Costs and Demand Pressure Remain Key Risks: The industry still faces several macro risks. Higher fuel prices and inflation can pressure consumers, leading to smaller fill-ups, lower-grade fuel choices or softer store traffic. At the same time, steep backwardation in refined-product markets can raise the cost of carrying hedged inventory, reducing the benefit of favorable selling margins. Geopolitical events can further increase price swings and complicate inventory management. These pressures may not always cause a sharp drop in demand, but they can make earnings less predictable. If weaker consumer spending combines with elevated financing and operating costs, refining and marketing MLP profitability could come under pressure.
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 #40, which places it in the top 16% of 247 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.
The industry’s position in the top 50% of the Zacks-ranked industries is a result of improving earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are becoming optimistic about this group’s earnings growth potential. As a matter of fact, the industry’s earnings estimates for 2026 have gone up nearly 22.6% in the past year.
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 Outperforms S&P 500 & Sector
The Zacks Oil and Gas – Refining & Marketing MLP industry has fared better than the Zacks S&P 500 composite and the broader Zacks Oil – Energy sector over the past year.
The industry has gained 46.2% over this period compared with the broader sector’s increase of 30.8%. Meanwhile, the S&P 500 has gone up 16.2%.
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 12.25X, significantly lower than the S&P 500’s 18.02X. It is, however, well above the sector’s trailing 12-month EV/EBITDA of 5.96X.
Over the past five years, the industry has traded as high as 13.33X and as low as 7.65X, with a median of 10.13X, as the chart below shows.
Trailing 12-Month Enterprise Value-to-EBITDA (EV/EBITDA) Ratio (Past Five Years)
3 Stocks to Focus On
Western Midstream Partners LP: Western Midstream Partners provides natural gas, crude oil, NGL and produced-water services across major U.S. producing basins. The Zacks Rank #1 (Strong Buy) firm operates gathering, processing, treating, storage, pipeline and water infrastructure, with a particularly strong position in the Delaware Basin. Its network helps producers move hydrocarbons and manage water efficiently. You can see the complete list of today’s Zacks #1 Rank stocks here.
Western Midstream Partners also benefits from mostly fee-based contracts, long-term commitments and acreage dedications that support cash-flow stability. Growth projects such as North Loving II and the Pathfinder Pipeline are expected to expand capacity. The partnership also maintains investment-grade credit ratings and focuses on disciplined growth, leverage management and steady distributions to unitholders.
The 2026 Zacks Consensus Estimate for Western Midstream Partners indicates 22.8% year-over-year earnings per unit growth. Over the past 60 days, the Zacks Consensus Estimate for its 2026 earnings has moved up 4.6%.WES units have moved up 17.8% in a year.
Price and Consensus: WES
Global Partners LP: Global Partners is a diversified energy distribution and retail company with operations spanning terminals, wholesale fuel supply, gasoline stations and convenience stores. The partnership owns, leases or supplies about 1,600 fueling locations and operates liquid-energy terminals from Maine to Florida and into the Gulf States. Its business links sourcing, storage, distribution and retail sales.
Global Partners LP also serves commercial, industrial and government customers with fuels and related services. Its integrated model helps capture product margins across several parts of the value chain. The partnership continues to grow through acquisitions, retail development and market expansion while offering renewable fuels and expanding EV charging access.
The 2026 Zacks Consensus Estimate for Global Partners indicates 165.6% year-over-year earnings per unit growth. The Zacks Rank #2 (Buy) operator has a trailing four-quarter earnings surprise of roughly 115.3%, on average. GLP units have gone up 4.7% in a year.
Price and Consensus: GLP
NGL Energy Partners LP: NGL Energy Partners operates through Water Solutions, Crude Oil Logistics and Liquids Logistics, with its largest business centered on produced-water handling. The Zacks Rank #3 (Hold) firm owns an extensive Delaware Basin water network that includes large-diameter pipelines, disposal facilities, recycling capabilities and long-haul transportation infrastructure. The system serves upstream producers under long-term, fixed-fee contracts backed by acreage dedications and volume commitments.
NGL Energy Partners LP also moves crude oil through storage, terminals and the Grand Mesa Pipeline, while its liquids business supplies propane, butane and related products across the United States and Canada. Its broad logistics footprint supports customers across several energy markets.
The fiscal 2027 Zacks Consensus Estimate for NGL Energy Partners indicates 360.4% year-over-year earnings per unit growth. It has a market capitalization of nearly $2 billion. NGL units have surged 155.8% in a year.
Price and Consensus: NGL