DISCLOSURE: Readers should assume that all stocks mentioned in this column are owned by the author and/or his firm unless otherwise noted.

As regular readers of this column know, I have waded in the midstream of the energy sector many times over the years. It has actually been the rare week that we have not had at least one such position on my InsiderInsights.com newsletter’s Recommended List.

The attraction of the group is obvious to many CPAs and other savvy financial professionals. As energy use increases inexorably across the U.S., and our reliance on foreign energy sources grows, the need intensifies to get fuels from where they are offloaded to where they are actually consumed. That takes the sort of infrastructure that the various midstream companies operate and build out.

Domestic production of gas has also moved into some less mainstream areas of the country thanks to exploration and production (E&P) techniques that have improved the hit rate of finding new gas sources. These new sources also need links to end markets, however, adding to the growth story of the sector.

In terms of the payback of investing in midstream firms, most are organized as master limited partnerships (MLPs) that throw off income to shareholders. Decent yields add to the attraction of the group.

One of the largest players in the midstream is Enterprise Products Partners LP (NYSE: EPD). The firm provides transportation and storage of natural gas, natural gas liquids (NGLs), and crude oil through its network of more than 35,000 miles of onshore and offshore pipelines. It also operates fractionators that produce NGLs from natural gas.

EPD has been on my Recommended List twice before, and has proven a profitable bet. My last foray produced a 30.1 percent total return over a 70-week period ending October 2005. I would be happy with similar performance over the next year-and-a-half, and view EPD as a low-risk/moderate-return position.

The returns should come from the increased cash flow generated by the steady growth in business at Enterprise. This should allow EPD’s quarterly distributions to continue increasing in the ballpark of seven percent year-over-year, and keep it moving steadily upwards to boot, supplying reasonable capital appreciation.

Steady does not mean uninterrupted, however. Hiccups in the charts of midstream players occur for weather-related reasons (when hurricanes threaten to disrupt or even destroy operations), and if investors don’t believe that a new investment project is worthwhile. Being one of the larger midstream players with diversified assets, however, EPD is less vulnerable to material disruptions in its business than most peers.

Nonetheless, EPD has traded down by over 10 percent from highs hit just a couple months ago. The entire midstream group has seemingly been hit by subprime concerns, and EPD has not been immune. But I view the group’s sell-off as particularly unwarranted, and think it is a very opportunistic time to add to my midstream exposure, which also includes Martin Midstream LP (NASDAQ: MMLP), and Kinder Morgan Mgt LLC (NYSE: KMR).

To be sure, the capital intensive nature of the midstream business makes concerns about the ability to borrow legitimate. And to the extent that credit markets seizing up could affect borrowing, these stocks deserved to weaken. But the credit window has not been closed for the investment-grade midstream operators. That is proven by recent successful debt offerings by both Boardwalk Pipeline Partners (NYSE: BWP) and Kinder Morgan Energy (NYSE: KMP), which each raised $500 million recently. Enterprise should also find a good reception when it next needs to raise funds.

Acting opportunistically himself, Enterprise’s founder, Dan Duncan, continues to plow back money into the firm. In August alone, he invested another $14 million in EPD at an average cost of $29.42 per share. That may not be a material amount of money for this billionaire, but Duncan did not become successful by throwing away such sums. And although he has been a persistent (and smart) accumulator of his firm’s shares over the years, his activity in August represents an obvious acceleration of buying that seems to indicate that the recent sell-off is a particularly good buying opportunity.

I agree. And EPD should be especially attractive for investors looking for income, but still understandably concerned about the sustainability of yields on financial stocks.

Jonathan Moreland is the Director of Research at New York-based Insider Insights.com. Click here for a FREE trial issue of the firm's weekly newsletter Insider Insights.