Investors looking for better income than the S&P 500’s 1.3% dividend yield should consider energy stocks, which average about 3.5% yield. Some top picks in the sector offer even higher returns. Chevron, TotalEnergies, and Enterprise Products Partners stand out with yields up to 6.6%. These stocks provide a strong income opportunity despite recent market volatility.
Chevron: A Steady Dividend Performer
Chevron has raised its dividend for 38 years in a row, showing resilience in the volatile energy market. Its stock price has dropped recently, pushing its dividend yield to an attractive 4.8%, much higher than the average energy stock. Chevron’s integrated business model covers drilling, pipelines, and refining, which helps balance out industry ups and downs. The company also has a strong financial position, with low debt, allowing it to maintain dividends even in tough times.
TotalEnergies: Combining Energy and Clean Power
TotalEnergies, a French energy giant, offers a 6.5% dividend yield. Like Chevron, it operates across the energy supply chain but carries more debt. However, it balances this with significant cash reserves. TotalEnergies is investing heavily in clean energy, using profits from traditional fuels to build a future in electricity and renewables. This makes it a good choice for investors who want income plus exposure to cleaner energy.
Enterprise Products Partners: Stable Income Without Commodity Risk
Enterprise Products Partners is a midstream company that owns pipelines and infrastructure for oil and gas transport. It pays a high yield of about 6.6% and has increased its distributions for 26 years. Unlike producers, Enterprise’s earnings depend more on energy demand than on volatile commodity prices. This makes its cash flow more stable. While its growth is slow, its steady income appeals to investors focused on dividends.
Better Than Average Yields
Instead of settling for an energy index yield of 3.5%, investors can get higher income from these three companies. Chevron and TotalEnergies offer strong dividends with integrated operations, while Enterprise Products Partners provides high yield with less exposure to price swings. Starting with $500 in each could build a solid high-yield energy portfolio.
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