Home / Business and Economy / Energy ETFs: Growth vs. Income Showdown
Energy ETFs: Growth vs. Income Showdown
12 Sep
Summary
- MLPX focuses on midstream infrastructure, offering higher yields.
- XOP provides broader exposure to upstream energy production.
- MLPX has a 4.1% yield; XOP has a 1.7% yield.
Two distinct energy exchange-traded funds (ETFs) offer divergent investment strategies for navigating the sector. The Global X-MLP & Energy Infrastructure ETF (MLPX), launched in 2013, concentrates on midstream infrastructure, focusing on companies involved in transporting and storing commodities.
This focus on infrastructure results in different price behaviors compared to extraction markets. MLPX, with 29 holdings, features significant positions in TC Energy (8.9%), Williams Cos. (8.86%), and Enbridge (8.62%). It currently offers a 4.1% dividend yield, based on $3.07 per share in trailing 12-month distributions.
In contrast, the State Street SPDR S&P Oil & Gas Exploration & Production ETF (XOP), established in 2006, provides broader exposure to the upstream energy segment. It holds 51 positions, primarily in oil and gas exploration and production companies, with a modified equal-weighted index that gives meaningful impact to mid- and small-cap firms.
XOP's top holdings include PBF Energy Class A (3.89%), HF Sinclair (3.27%), and Delek US (3.26%). This ETF has paid $3.25 per share over the past 12 months, resulting in a 1.7% yield on its recent share price.
