MPLX (MPLX 2.34%) has been a very steady grower over the years. It has invested heavily in organic expansion projects and acquisitions to grow its midstream footprint. These investments have paid big dividends for investors over the years. The master limited partnership (MLP) has increased its distribution every year since it came public in 2012.

The MLP has plenty of fuel to continue growing its high yield of nearly 8.5% in the coming years. Here's a look at what fuels that view.

A financial fortress

Higher-yielding dividend stocks tend to be higher risk. They often have very high dividend payout ratios and leverage ratios, which puts them at a higher risk of needing to cut their dividends if they run into financial trouble.

However, that's not the case with MPLX. The MLP has a very low-risk business model.

It generates very stable cash flow backed by long-term, fixed-fee contracts and government-regulated rate structures. The company currently produces enough cash to cover its lucrative distribution by a very comfy 1.5 times. That enables the company to retain cash to fund expansion projects and maintain a strong financial foundation.

The MLP generated nearly $4.3 billion in net cash provided by operating activities through the first nine months of this year, a 9.3% increase from the prior-year period. It invested over $1.6 billion into organic expansion projects and acquisitions. That left it with about $2.6 billion in free cash flow, only $5 million shy of its distribution payments through the first nine months of the year.

MPLX easily covered that deficit. It ended the third quarter with $2.4 billion of cash on its balance sheet and a 3.4 leverage ratio, well below the 4.0 leverage ratio its stable cash flows can support. The MLP has so much excess financial capacity that it repurchased $76 million of its units during the third quarter, bringing its year-to-date total to $226 million.

Increasingly visible growth

MPLX has grown its earnings and cash flow at a mid-single-digit rate since 2020, fueled by organic expansion projects and accretive acquisitions. That growth and its conservative financial profile have allowed it to increase its distribution at a 10.7% compound annual rate since 2021, including by 12.5% this year. The company's "growing portfolio is expected to support this level of annual distribution increases in the future," stated CEO Maryann Mannen in the third-quarter earnings press release.

The MLP has a growing list of expansion projects underway:

• BANGL: The company and its joint venture partners are increasing the capacity of this natural gas liquids pipeline, which they expect to complete in the first quarter of 2025.
• Blackcomb and Rio Bravo: MPLX and its partners are building these natural gas pipelines to increase capacity to Gulf Coast export markets. They should both enter service in the second half of 2026.
• Secretariat: The MLP is building a new natural gas processing plant in the Permian, which should come online in the second half of 2025. It completed the Preakness II plant in the region in July.
• Harmon Creek: The company is building the Harmon Creek III plant in the Marcellus, which should be online in the second half of 2026. The MLP finished the Harmon Creek II plant in February.

The projects provide the MLP with growth visibility through 2026. They will supply it with incremental cash flow as they come online, giving it more fuel to increase its distribution.

In addition to organic expansions, MPLX has ample financial flexibility to make accretive acquisitions as opportunities arise. For example, in the second quarter, it bought another 20% interest in the BANGL pipeline joint venture. Meanwhile, in the first quarter, it purchased additional ownership interests in existing joint ventures and a dry gas gathering system for $625 million. Future acquisitions could give it even more fuel to increase its distribution.

High octane income and growth

MPLX pays a lucrative distribution that it should have no trouble continuing to grow in the future. With its strong financial profile and visible growth coming down the pipeline through at least 2026, the MLP could produce high-octane total returns. That makes it a great option for those comfortable with investing in MLPs, which send their investors a Schedule K-1 Federal Tax Form each year.