Three Energy Companies Offering Reliable Dividends
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Feb 03 2026
0mins
Source: Fool
- Stability of Energy Transfer: Energy Transfer (ET), one of the largest midstream companies globally, operates thousands of miles of pipelines, generating 90% of its EBITDA from contracted fees, ensuring a high dividend yield of 7.25%, which highlights its stability and reliability in the energy sector.
- Growth Potential of Renewables: NextEra Energy (NEE), a leading producer of wind and solar energy serving over 12 million customers, has increased its dividend for 30 consecutive years and is expected to achieve an 8% annual earnings growth, showcasing its strong growth potential in the renewable energy space.
- Market Position of ExxonMobil: ExxonMobil (XOM), one of the largest energy companies worldwide, boasts a 42-year record of dividend increases with a current yield of 3%, and its recent acquisition of Pioneer Natural Resources has further solidified its long-term growth potential in the Permian Basin.
- Overall Industry Performance: While the oil and gas industry may seem dull, the stable dividends and strong market positions of Energy Transfer, NextEra Energy, and ExxonMobil make them focal points for investors, providing reliable investment returns.
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Analyst Views on ET
Wall Street analysts forecast ET stock price to rise
11 Analyst Rating
7 Buy
4 Hold
0 Sell
Moderate Buy
Current: 20.360
Low
17.00
Averages
20.65
High
23.00
Current: 20.360
Low
17.00
Averages
20.65
High
23.00
About ET
Energy Transfer LP owns and operates a diversified portfolios of energy assets in the United States, with more than 140,000 miles of pipeline and associated energy infrastructure. The Company’s strategic network spans 44 states with assets in all of the major United States production basins. Its core operations include complementary natural gas midstream, intrastate and interstate transportation and storage assets; crude oil, natural gas liquids (NGL) and refined product transportation and terminalling assets; and NGL fractionation. The Company’s segments include intrastate transportation and storage, interstate transportation and storage, midstream, NGL and refined products transportation and services, crude oil transportation and services, investment in Sunoco LP, investment in USA Compression Partners, LP (USAC), and all other. It also owns Lake Charles LNG Company, LLC, its wholly owned subsidiary, which owns an LNG import terminal and regasification facility.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Oil Price Surge Warning: Gulf Situation Impact
- Oil Shortage Warning: At the Milken Global Conference, Chevron CEO Mike Wirth highlighted that the closure of the Strait of Hormuz could lead to tight global crude oil inventories, reminiscent of the 1970s oil crisis, presenting potential investment opportunities, particularly benefiting U.S. downstream and midstream energy companies.
- ConocoPhillips' Advantage: ConocoPhillips operates far from the Middle East conflict, with production concentrated in oil-rich regions like Alaska and Texas, positioning it to benefit significantly from soaring oil prices due to supply shocks, which may lead to increased quarterly dividends and share repurchase plans.
- Energy Transfer's Distribution Growth: As a master limited partnership, Energy Transfer boasts a forward dividend yield of 6.75%, and in light of the Strait of Hormuz crisis, it is expected to exceed its previous annual distribution growth target of 3%-5% due to rising demand for U.S. oil exports.
- Occidental Petroleum's Potential Gains: Occidental Petroleum's stock has surged 38% year-to-date, and if supply shocks persist, its earnings could exceed analyst forecasts of $5.42 per share, with potential for stock prices to reach high double-digit levels if oil prices continue to rise.
See More
Middle East Conflict Elevates Energy Security Concerns
- Increased Energy Security Importance: The geopolitical conflict in the Middle East has restricted global energy supplies, prompting the U.S. to reassess its energy sources and strengthen supply relationships with countries like Canada, which could enhance the market position of midstream companies such as Enbridge and Enterprise Products Partners.
- Rising Demand for Clean Energy: While oil and gas will remain crucial, the current supply shock may accelerate the shift towards clean energy, with consumers increasingly favoring electric vehicles, thereby driving investments and growth for companies like NextEra Energy in the renewable sector.
- Growth in Electric Vehicle Sales: As consumer interest in clean energy rises, used EV sales have started to increase, indicating a growing demand for electric transportation that could impact the market share of traditional combustion engine vehicles.
- Global Energy Strategy Reshaping: The situation in the Middle East is prompting countries to consider partnerships with politically and economically stable nations, leading to a potential shift in energy policies towards renewable sources to reduce reliance on external supplies.
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Top High-Yield MLP Stocks to Buy Now
- Energy Transition Potential: Energy Transfer (ET) currently offers a 6.9% dividend yield with plans to grow distributions by 3% to 5% in the coming years, and its 8.5x enterprise value to EBITDA ratio highlights its attractiveness and growth potential in the energy sector.
- Consistent Dividend Growth: Enterprise Products Partners (EPD) has increased its dividend for 27 consecutive years, currently yielding 5.8% and achieving a 2.8% increase in the first quarter, showcasing its resilience and appeal in uncertain markets.
- High Yield Appeal: Western Midstream Partners (WES) leads with an 8.5% dividend yield, and its strong first-quarter results indicate adjusted EBITDA will approach the high end of $2.6 billion to $2.7 billion guidance, reflecting its growth potential in the market.
- Acquisition Strengthens Position: Western Midstream's recent $1.6 billion acquisition of Brazos in the Permian region is expected to add $200 million in EBITDA by 2027, further solidifying its market position and enhancing future growth prospects.
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Brent Crude Oil Prices Surge Over 70% Amid Regional Conflict
- Oil Price Surge: Brent crude oil prices have surged over 70% this year, surpassing $100 per barrel, primarily due to U.S. and Israeli airstrikes against Iran that sparked regional conflict and restricted oil shipments through the Strait of Hormuz, impacting global markets.
- Investment Strategy Shift: As the conflict intensifies, investors have pivoted back to oil stocks; however, these stocks may lose momentum once the conflict subsides, prompting a recommendation for investors to consider more balanced midstream stocks to mitigate exposure to volatile oil prices.
- Energy Transfer's Advantage: Energy Transfer operates over 140,000 miles of pipeline across 44 states, delivering natural gas, LNG, and crude oil, with its distributable cash flow (DCF) easily covering annual distributions over the past five years, demonstrating resilience and risk mitigation capabilities.
- Future Earnings Outlook: Analysts expect Energy Transfer's earnings per unit (EPU) to rise by 20% to $1.46 by 2026, and with a current share price of $20, the valuation remains attractive at less than 14 times that estimate, making it an appealing option for income-seeking investors.
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Investment Analysis: Occidental Petroleum vs. Energy Transfer
- Oil Price Impact: Occidental Petroleum (Oxy) has seen its stock rise 34% this year due to WTI crude oil prices surging over 90% to about $110 per barrel, while Energy Transfer (ET) only increased by 17%, highlighting the superior profitability of upstream companies during oil price hikes.
- Business Model Differences: Oxy focuses primarily on upstream operations, generating massive profits as long as oil prices remain above its breakeven point of approximately $60 per barrel; in contrast, ET, as a midstream company, benefits from higher oil prices but sees limited revenue growth primarily from transportation fees.
- Future Growth Expectations: Analysts forecast that by 2026, Oxy's revenue and EPS will increase by 19% and 283%, respectively, indicating a recovery from three years of declining revenues and earnings, while ET's revenue and earnings per unit are expected to rise by 27% and 22%, but at a slower pace than Oxy.
- Investment Value Assessment: Oxy's current stock price of $55 reflects a valuation of 14 times earnings, suggesting it is undervalued; meanwhile, ET's stock at $19 trades at 13 times earnings, with a higher dividend yield of 6.9%, yet Oxy presents a more attractive growth potential.
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Energy Transfer: High-Yield Investment Opportunity Amid Market Volatility
- High-Yield Distribution: Energy Transfer's forward distribution yield stands at approximately 6.8%, significantly higher than the S&P 500's yield of 1%, making it an attractive option for investors amid rising inflation and geopolitical uncertainties.
- Financial Stability: Despite past distribution cuts, Energy Transfer now boasts its strongest financial position in history, generating ample cash flow to cover distribution payouts, with management projecting annual distribution growth of 3% to 5%, which reassures investors.
- Increased Market Demand: The ongoing conflict in the Middle East enhances the attractiveness of U.S. oil and gas, and with over 144,000 miles of pipeline, Energy Transfer is well-positioned to transport these fuels, likely benefiting from increased demand.
- Reliable Income Source: An investment of approximately $14,730 in Energy Transfer is expected to generate at least $1,000 in passive income over the next 12 months, and while investing in MLPs involves tax complexities, the stable cash flow and growth potential make it an ideal choice for income investors.
See More
Oil Price Surge Warning: Gulf Situation Impact
- Oil Shortage Warning: At the Milken Global Conference, Chevron CEO Mike Wirth highlighted that the closure of the Strait of Hormuz could lead to tight global crude oil inventories, reminiscent of the 1970s oil crisis, presenting potential investment opportunities, particularly benefiting U.S. downstream and midstream energy companies.
- ConocoPhillips' Advantage: ConocoPhillips operates far from the Middle East conflict, with production concentrated in oil-rich regions like Alaska and Texas, positioning it to benefit significantly from soaring oil prices due to supply shocks, which may lead to increased quarterly dividends and share repurchase plans.
- Energy Transfer's Distribution Growth: As a master limited partnership, Energy Transfer boasts a forward dividend yield of 6.75%, and in light of the Strait of Hormuz crisis, it is expected to exceed its previous annual distribution growth target of 3%-5% due to rising demand for U.S. oil exports.
- Occidental Petroleum's Potential Gains: Occidental Petroleum's stock has surged 38% year-to-date, and if supply shocks persist, its earnings could exceed analyst forecasts of $5.42 per share, with potential for stock prices to reach high double-digit levels if oil prices continue to rise.
See More
Middle East Conflict Elevates Energy Security Concerns
- Increased Energy Security Importance: The geopolitical conflict in the Middle East has restricted global energy supplies, prompting the U.S. to reassess its energy sources and strengthen supply relationships with countries like Canada, which could enhance the market position of midstream companies such as Enbridge and Enterprise Products Partners.
- Rising Demand for Clean Energy: While oil and gas will remain crucial, the current supply shock may accelerate the shift towards clean energy, with consumers increasingly favoring electric vehicles, thereby driving investments and growth for companies like NextEra Energy in the renewable sector.
- Growth in Electric Vehicle Sales: As consumer interest in clean energy rises, used EV sales have started to increase, indicating a growing demand for electric transportation that could impact the market share of traditional combustion engine vehicles.
- Global Energy Strategy Reshaping: The situation in the Middle East is prompting countries to consider partnerships with politically and economically stable nations, leading to a potential shift in energy policies towards renewable sources to reduce reliance on external supplies.
See More
Top High-Yield MLP Stocks to Buy Now
- Energy Transition Potential: Energy Transfer (ET) currently offers a 6.9% dividend yield with plans to grow distributions by 3% to 5% in the coming years, and its 8.5x enterprise value to EBITDA ratio highlights its attractiveness and growth potential in the energy sector.
- Consistent Dividend Growth: Enterprise Products Partners (EPD) has increased its dividend for 27 consecutive years, currently yielding 5.8% and achieving a 2.8% increase in the first quarter, showcasing its resilience and appeal in uncertain markets.
- High Yield Appeal: Western Midstream Partners (WES) leads with an 8.5% dividend yield, and its strong first-quarter results indicate adjusted EBITDA will approach the high end of $2.6 billion to $2.7 billion guidance, reflecting its growth potential in the market.
- Acquisition Strengthens Position: Western Midstream's recent $1.6 billion acquisition of Brazos in the Permian region is expected to add $200 million in EBITDA by 2027, further solidifying its market position and enhancing future growth prospects.
See More
Brent Crude Oil Prices Surge Over 70% Amid Regional Conflict
- Oil Price Surge: Brent crude oil prices have surged over 70% this year, surpassing $100 per barrel, primarily due to U.S. and Israeli airstrikes against Iran that sparked regional conflict and restricted oil shipments through the Strait of Hormuz, impacting global markets.
- Investment Strategy Shift: As the conflict intensifies, investors have pivoted back to oil stocks; however, these stocks may lose momentum once the conflict subsides, prompting a recommendation for investors to consider more balanced midstream stocks to mitigate exposure to volatile oil prices.
- Energy Transfer's Advantage: Energy Transfer operates over 140,000 miles of pipeline across 44 states, delivering natural gas, LNG, and crude oil, with its distributable cash flow (DCF) easily covering annual distributions over the past five years, demonstrating resilience and risk mitigation capabilities.
- Future Earnings Outlook: Analysts expect Energy Transfer's earnings per unit (EPU) to rise by 20% to $1.46 by 2026, and with a current share price of $20, the valuation remains attractive at less than 14 times that estimate, making it an appealing option for income-seeking investors.
See More
Investment Analysis: Occidental Petroleum vs. Energy Transfer
- Oil Price Impact: Occidental Petroleum (Oxy) has seen its stock rise 34% this year due to WTI crude oil prices surging over 90% to about $110 per barrel, while Energy Transfer (ET) only increased by 17%, highlighting the superior profitability of upstream companies during oil price hikes.
- Business Model Differences: Oxy focuses primarily on upstream operations, generating massive profits as long as oil prices remain above its breakeven point of approximately $60 per barrel; in contrast, ET, as a midstream company, benefits from higher oil prices but sees limited revenue growth primarily from transportation fees.
- Future Growth Expectations: Analysts forecast that by 2026, Oxy's revenue and EPS will increase by 19% and 283%, respectively, indicating a recovery from three years of declining revenues and earnings, while ET's revenue and earnings per unit are expected to rise by 27% and 22%, but at a slower pace than Oxy.
- Investment Value Assessment: Oxy's current stock price of $55 reflects a valuation of 14 times earnings, suggesting it is undervalued; meanwhile, ET's stock at $19 trades at 13 times earnings, with a higher dividend yield of 6.9%, yet Oxy presents a more attractive growth potential.
See More
Energy Transfer: High-Yield Investment Opportunity Amid Market Volatility
- High-Yield Distribution: Energy Transfer's forward distribution yield stands at approximately 6.8%, significantly higher than the S&P 500's yield of 1%, making it an attractive option for investors amid rising inflation and geopolitical uncertainties.
- Financial Stability: Despite past distribution cuts, Energy Transfer now boasts its strongest financial position in history, generating ample cash flow to cover distribution payouts, with management projecting annual distribution growth of 3% to 5%, which reassures investors.
- Increased Market Demand: The ongoing conflict in the Middle East enhances the attractiveness of U.S. oil and gas, and with over 144,000 miles of pipeline, Energy Transfer is well-positioned to transport these fuels, likely benefiting from increased demand.
- Reliable Income Source: An investment of approximately $14,730 in Energy Transfer is expected to generate at least $1,000 in passive income over the next 12 months, and while investing in MLPs involves tax complexities, the stable cash flow and growth potential make it an ideal choice for income investors.
See More
