I've covered the Global X MLP & Energy Infrastructure ETF (NYSEARCA:MLPX), a simple midstream energy index ETF, several times in the past. I've almost always been bullish, due to the fund's comparatively safe midstream energy holdings and above-average, growing 4.6% dividend yield. Considering recent market movements, thought to write a quick article looking at some recent developments for the fund.

MLPX has seen strong, above-average capital gains of 19.6% YTD.

MLPX's dividends have seen strong growth too, of 9.7%. It currently yields 4.7%.

MLPX has become more expensive on valuation grounds, but the same is true for most equities, and it remains cheaper than the S&P 500.

MLPX's underlying holdings have almost certainly seen good earnings growth.

Overall, I'm quite happy with MLPX's results, and remain bullish.

MLPX - Recent Developments

Strong Capital Gains

MLPX's share price has increased by 19.6% YTD. Capital gains have been strong, and higher than those of the S&P 500 and benchmark energy ETFs, the fund's most relevant comparisons.

Gains were partly due to a recent shift from growth to value:

Partly a recovery / return to normalcy following sub-par 2022 returns:

MLPX's strong capital gains were a significant benefit for investors in the past, but something of a negative for prospective investors. Strong capital gains mean higher share prices, which should mean more expensive valuations. MLPX has become more expensive, although the same is true of most other equity sectors and ETFs.

MLPX remains significantly cheaper than the S&P 500, slightly more expensive than broader energy index ETFs.

Strong Dividend Growth

Blue-chip midstream energy companies aim for consistent, moderate dividend growth every year. This has led to good dividend growth for MLPX since inception, and for most relevant time periods. Growth was particularly strong prior to 2016, slowed down as the industry shifted towards a self-financing business model, and has picked up since 2022, following the pandemic. MLPX's dividends have grown by 9.9% YTD, a solid figure.

Annualizing the fund's latest dividend payments gives me a 4.9% forward yield. The fund's SEC yield, a standardized measure of a fund's underlying generation of income, is higher, at 5.6%. ETFs tend to distribute any and all income generated to shareholders, so the fund's dividends should increase to around 5.6% in the coming months. Growth is somewhat dependent on underlying midstream energy performance and dividend growth too, however.

As an aside, I predicted dividend growth for MLPX last year based on the same analysis, and dividends did, in fact, grow. Some ETF behavior is easy to predict, although obviously sometimes the market throws us a curveball.

On a more negative note, MLPX's capital gains / higher share prices have led to the lowest dividend yields post-pandemic. Midstream companies shifting towards self-funded CAPEX also played a role in this.

On a more positive note, the figures above do not fully account for MLPX's recent dividend hike, or (potential) future growth. MLPX's 5.6% SEC yield is a bit higher than the fund's recent dividend yield average, for instance.

Overall, MLPX's strong dividend growth and above-average dividend yield are significant benefits for the fund and its shareholders. Yields were higher before, so current entry points for the fund seem below-average.

Significant Total Returns, Although Volatile

MLPX's strong capital gains, dividend growth, and above-average dividend yield have led to significant total returns YTD. MLPX has moderately outperformed the S&P 500, significantly outperformed broader energy indexes.

MLPX's strong returns and outperformance were significant benefits for investors in the past. In my opinion, the outperformance is also (partial) proof of a successful business model and investment strategy. The blue-chip midstream energy model of capital discipline, self-financing, and distributing excess cash to shareholders has worked in the past and should continue to work moving forward.

As further evidence of the above, I've given bullish ratings on MLPX seven times in the past, and it has outperformed the S&P 500 each time. This includes my first article all the way back in late 2018 (can't believe it has been that long).

and my latest one, in March:

I'm surprised at MLPX's consistency, although the fund does sometimes significantly underperform, as was the case in 2023. It has always ended up pulling through though, so far at least.

As mentioned previously, MLPX's outperformance is (partial) proof of a successful investment strategy or analysis. MLPX's cheap valuation and above-average dividend yield has led to outperformance in the past, and that could definitely continue to be the case moving forward.

Good Underlying Earnings Growth

MLPX's underlying holdings have generally seen good earnings growth YTD. This is the case for most of the fund's largest companies, including Enbridge and ONEOK. At the same time, MLPX's share price has increased by 18.4% YTD, with its PE ratio rising by only 11.0%. Results are consistent with high single-digit earnings growth YTD, although (potential) changes in portfolio composition make these figures somewhat fraught.

Conclusion

Recent developments for MLPX have been overwhelmingly positive, with the fund seeing positive capital gains, dividend growth, total returns, and outperformance. Valuations have increased, but the same is true of the broader stock market, and the fund remains cheaper than the S&P 500. MLPX remains a strong investment opportunity, and a buy.