Far too many investors ignore Western Gas Partners LP (NYSE: WES) because the units yield 4.2 percent–well below the 6.3 percent distribution yield offered by the Alerian MLP Index.

Although the stock’s current yield is at the low end of the range for its peer group, Western Gas Partners has grown its payout at an average annual rate of more than 17 percent over the past three years. We expect the MLP’s distribution to increase 15 percent to 20 percent annually over the next two years. This rapid growth makes up for the stock’s subpar yield.

Western Gas Partners owns a network of natural gas and oil pipelines, gathering systems and processing plants in Texas, Oklahoma and the Rockies. The MLP in the first quarter transported an average of 2.41 billion cubic feet of natural gas equivalent per day–up from about 1.5 billion cubic feet of natural gas equivalent per day in the same quarter one year ago.

The majority of Western Gas Partners’ midstream assets serve natural gas-producing fields, but almost three-quarters of its gross margins comes from infrastructure located near the liquids-rich Eagle Ford Shale and the Niobrara Shale in Colorado and Wyoming. The MLP’s high percentage of fee-generating assets and the potential to purchase assets at advantageous prices from its general partner.

Exploration and production giant Anadarko Petroleum Corp (NYSE: APC), which controls the general partner, has fueled the MLP’s recent distribution growth through a generous program of drop-down transactions. With a 44 percent equity stake in Western Gas Partners and control of the general partner, Anadarko Petroleum has every incentive to support the MLP. The two have struck up a mutually beneficial relationship in the Denver-Julesburg (DJ) Basin of Colorado, where the producer drills actively and Western Gas Partners owns a substantial portfolio of midstream assets.

Anadarko Petroleum plans to drill 170 horizontal wells in the DJ Basin, a plan that should fuel volume growth on Western Gas Partners’ infrastructure. Moreover, the general partner owns an additional 16 gas-gathering systems, eight processing plants and two liquids pipelines that could be candidates for drop-down transactions. With Anadarko Petroleum investing $1 billion to construct or acquire midstream assets in 2011, the general partners’ portfolio continues to swell.

Western Gas Partners generates about 96 percent of its gross margin under fee-based or fixed-price contracts–many of which are with Anadarko Petroleum–providing a degree of protection against swings in commodity prices. Conservative management also ensures that the firm’s ample DCF provides ample coverage for its distribution.

Management’s 2012 forecast calls for distribution growth of between 16 and 20 percent, fueled by a combination of new projects coming onstream in the DJ Basin. Western Gas Partners LP rates a buy up to 48 in how they rate.

With an enterprise value of less than $250 million, American Midstream Partners LP (NYSE: AMID) is a small-cap MLP that went public in late 2011 to little fanfare. One of the partnership’s best assets is its size; even modest acquisitions or bolt-on projects can produce enough incremental cash flow to boost the distribution. American Midstream Partners can generate meaningful growth that would be too small to move the needle for many of its larger peers.

The MLP’s gathering and processing unit comprises nine gathering systems and four processing facilities in Louisiana, Mississippi, Tennessee, Texas and Alabama. Fee-based contract arrangements account for more than 40 percent of segment margin, while percent-of-proceeds (POP) deals contribute the remaining 60 percent.  Although POP deals expose American Midstream Partners to commodity prices, the MLP’s extensive hedge book mitigates this risk. In the first quarter of 2012, the gathering and processing segment accounted for about two-thirds of the MLP’s total gross margins.

American Midstream Partners’ transmission assets include two interstate pipelines and six intrastate lines. This segment has less exposure to commodity prices than the gathering and process business, as customers have reserved capacity on these pipelines under fee-based and fixed-margin contracts.

Low-risk, bolt-on acquisitions have driven much of the MLP’s distribution growth. On June 1, the publicly traded partnership acquired a majority interest in the Chatom Processing and Fractionation plant in Alabama for $55 million. This plant is located less than 15 miles from American Midstream Partners’ Bazor Ridge processing plant in Mississippi, so this isn’t new territory for the firm. The deal will be immediately accretive to cash flow, and management has declared its intention to boost the distribution by an additional 10 percent in the third quarter.

The MLP has the scope to grow its quarterly payout and double-digit rate in coming year. Based on its expected third-quarter payout, the MLP will yield about 9.5 percent–far higher than most midstream operators. American Midstream Partners LP rates a buy under 22 in How They Rate.