With inflation pushing wholesale prices up by 6.5% annually, investors are shifting focus toward stable cash-generating infrastructure like US midstream oil and gas pipeline operators. These assets stand out in a market where capital is becoming more selective and growth themes are less appealing. Three companies highlighted in this trend are Chevron, Antero Midstream, and PBF Energy, though a broader screen identified 19 more with similar potential.
Chevron (CVX), a global energy giant, generates most of its revenue from downstream activities (US$176.6 billion) and upstream operations (US$116.3 billion). Its extensive oil and gas transportation network is crucial for connecting growing upstream output with infrastructure that moves energy to refineries and export hubs. The company's midstream services are expected to see increased demand, particularly in regions like Alaska and offshore areas reopened for drilling, as part of the push to 'unleash American energy.'
Antero Midstream (AM) operates gathering pipelines, compressor stations, and processing assets in the Appalachian region. With a market cap of US$9.6 billion, the company benefits from its ties to wells that could see more drilling activity under faster permitting. Rising natural gas demand from new power plants and data centers in West Virginia is expected to boost throughput on Antero Midstream’s gathering and intrastate pipeline system, supporting higher fee-based revenue.
PBF Energy (PBF), with a market cap of US$8.7 billion, refines petroleum and operates logistics pipelines and terminals. Its logistics segment is directly linked to the push for moving higher volumes of oil and gas efficiently, especially with the renewed emphasis on LNG exports. The company's pipeline transportation, storage tanks, and terminaling for crude and refined products are critical in this infrastructure buildout.