MPLX (MPLX 3.20%) is a high-octane income investment. The master limited partnership (MLP) pays a prodigious cash distribution that currently yields 7.3%. Even better, the company has grown its payout at a more than 10% compound annual rate since 2021 (and increased it every single year since coming public in 2012).

The MLP already has enough fuel to continue growing its payout through 2029. However, that didn't stop it from recently topping off the tank by making a $715 million acquisition to further enhance its growth profile.

Drilling down into the deal

MPLX has agreed to buy the remaining 55% interest in BANGL, which it doesn't already own, for $715 million. The BANGL pipeline system currently transports 250,000 barrels of natural gas liquids (NGLs) per day from the Permian Basin of Texas to markets along the Gulf Coast. MPLX is currently expanding the pipeline's capacity to 300,000 barrels per day, which it expects to complete in the second half of next year.

The midstream company has been steadily increasing its ownership of this expanding pipeline system. Last year, it bought an additional 20% interest in the system, increasing its stake to 45%. Meanwhile, it recently completed a capacity increase to its current level of 250,000 barrels per day.

By acquiring full control over BANGL, MPLX will now get 100% of the rising cash flows produced by the pipeline. It will also have control over the future expansion opportunities for the system. The deal will also further enhance the company's strategy to move NGLs from the wellheads of the Permian Basin through its system, including its recently announced Gulf Coast fractionation complex, to the water via its export docks.

Lots of fuel to continue growing

MPLX expects its $715 million BANGL deal to be immediately accretive to its cash flow. That will add near-term income growth to support the company's long-term expansion profile.

The MLP has a growing backlog of organic expansion projects currently under construction. Its projects include:

• Natural gas processing: MPLX is building the Secretariat (Permian) and Harmon Creek III (Northeast) natural gas processing plants, which should enter commercial service in the fourth quarter of 2025 and the second half of 2026, respectively.
• Natural gas pipelines: The company and its partners are building the Blackcomb and Rio Bravo pipelines to increase gas transportation capacity from the Permian to export markets along the Gulf Coast. These projects should both enter service in the second half of next year.
• Gulf Coast fractionation complex: MPLX is building two NGL fractionation facilities to separate raw NGLs into pure streams (e.g., ethane, propane, and butane). The facilities are adjacent to Marathon Petroleum's Galveston Bay refinery and should enter service in 2028 and 2029, with Marathon buying the NGLs to market them globally.
• Oneok strategic partnership: The MLP formed a strategic partnership with Oneok to build a 400,000-barrel-per-day LPG export terminal and associated pipeline that should enter service in 2028.

These projects provide the MLP with growing cash flows through the end of the decade.

MPLX has ample financial capacity to fund those organic expansion projects and its BANGL acquisition. The company generates enough cash to cover its high-yielding distribution by a comfortable 1.5 times, enabling it to retain substantial cash to fund additional investments.

Meanwhile, it entered the year with a low 3.1 times leverage ratio. That's well below the 4.0x range its stable cash flows can support. Because of that, it has ample financial flexibility to make additional investments (acquisitions and organic expansion projects) as opportunities arise.

A well-oiled, income-producing machine

MPLX has been an excellent income investment over the years. The MLP has grown its high-yielding distribution at a high-octane pace, fueled by organic expansion projects and accretive acquisitions. Given the company's growing backlog of projects and recent purchase of the remaining interest in BANGL, that income growth should continue. Because of that, it's a great option for those seeking a lucrative and growing income stream (and are comfortable investing in an MLP that sends its investors a Schedule K-1 federal tax form each year).