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Bet on These 3 Energy Stocks With Attractive Dividend Yields
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Investing in energy companies or partnerships that offer handsome dividends or distribution yields is always wise. This is because paying out regular dividends or distributions signifies a stable and well-establish business model. Energy players are now in the spotlight since the overall business environment is favorable, aiding them to return capital to shareholders through dividends and distributions or stock repurchases.
Healthy Energy Business
Prices of both oil and natural gas are trading significantly higher, thanks to the escalation of Russian attacks on Ukraine. The price of West Texas Intermediate crude, trading at more than $95 per barrel mark, has improved drastically over the past year. Meanwhile, the price of natural gas is trading at more than $6 per million British thermal units, marking an improvement of more than 70% year to date.
Higher oil and gas prices are favorable for exploration and production activities, as reflected by upstream companies' addition of rigs in shale plays. With healthy commodity prices, exploration and production players are generating handsome cashflows, which will ultimately benefit shareholders in the form of lucrative dividend yields.
Midstream energy players, as usual, have lesser exposure to the volatility in commodity prices. This is because shippers are booking their assets for a long period of time. Hence, midstream companies generally derive hefty distribution yields for their unitholders.
3 Stocks With Lucrative Dividend Yield
Owing to the favorable energy business environment for upstream and midstream companies, which in turn could result in substantial dividend yields or distribution yields, it would be wise to bet on these three energy stocks. Two of the stocks sport a Zacks Rank #1 (Strong Buy), while one carries a Zacks Rank #2 (Buy). All the stocks generate a higher dividend yield than the energy sector. You can see the complete list of today’s Zacks #1 Rank stocks here.
Devon Energy Corporation (DVN - Free Report) is well-positioned to capitalize on the recent surge in oil price. This is because #1 Ranked Devon Energy is a leading producer of oil and gas in the United States.
Devon Energy is strongly focused on returning capital to shareholders. Based on its fourth-quarter 2021 financial performance, DVN has raised its fixed-plus-variable payout to a record-high $1 per share, reflecting a significant improvement from 34 cents in the first quarter of last year. Considering the dividend yield picture, Devon Energy’s yield of 6.64% is significantly higher than the 3.64% yield of the composite stocks belonging to the energy sector.
MPLX LP (MPLX - Free Report) is no exception among the leading midstream players to derive stable fee-based revenues since the partnership is the operator of midstream energy infrastructure and logistics assets. MPLX is also involved in services related to fuel distribution.
Looking at the distribution picture, distribution paid by MPLX in the three months ended Dec 31 last year was $1,345 million, signifying a considerable improvement from $742 million in the comparable period in 2020. The distribution yield of MPLX, with a Zacks Rank of 2, is hefty at 8.49%.
The Williams Companies, Inc. (WMB - Free Report) is the operator of pipeline assets spanning more than 30,000 miles. The Williams Companies generates stable cashflows as its midstream infrastructures handle 30% of the natural gas consumed daily in the United States.
The Williams Companies has a strong focus on creating long-term value for shareholders through the payment of attractive dividends. In 2022, Zacks #1 Ranked WMB projected annualized dividend payment of $1.70 per share, marking a 3.7% improvement from $1.64 in 2021. The dividend yield of WMB is handsome at 5.05%.
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Bet on These 3 Energy Stocks With Attractive Dividend Yields
Investing in energy companies or partnerships that offer handsome dividends or distribution yields is always wise. This is because paying out regular dividends or distributions signifies a stable and well-establish business model. Energy players are now in the spotlight since the overall business environment is favorable, aiding them to return capital to shareholders through dividends and distributions or stock repurchases.
Healthy Energy Business
Prices of both oil and natural gas are trading significantly higher, thanks to the escalation of Russian attacks on Ukraine. The price of West Texas Intermediate crude, trading at more than $95 per barrel mark, has improved drastically over the past year. Meanwhile, the price of natural gas is trading at more than $6 per million British thermal units, marking an improvement of more than 70% year to date.
Higher oil and gas prices are favorable for exploration and production activities, as reflected by upstream companies' addition of rigs in shale plays. With healthy commodity prices, exploration and production players are generating handsome cashflows, which will ultimately benefit shareholders in the form of lucrative dividend yields.
Midstream energy players, as usual, have lesser exposure to the volatility in commodity prices. This is because shippers are booking their assets for a long period of time. Hence, midstream companies generally derive hefty distribution yields for their unitholders.
3 Stocks With Lucrative Dividend Yield
Owing to the favorable energy business environment for upstream and midstream companies, which in turn could result in substantial dividend yields or distribution yields, it would be wise to bet on these three energy stocks. Two of the stocks sport a Zacks Rank #1 (Strong Buy), while one carries a Zacks Rank #2 (Buy). All the stocks generate a higher dividend yield than the energy sector. You can see the complete list of today’s Zacks #1 Rank stocks here.
Devon Energy Corporation (DVN - Free Report) is well-positioned to capitalize on the recent surge in oil price. This is because #1 Ranked Devon Energy is a leading producer of oil and gas in the United States.
Devon Energy is strongly focused on returning capital to shareholders. Based on its fourth-quarter 2021 financial performance, DVN has raised its fixed-plus-variable payout to a record-high $1 per share, reflecting a significant improvement from 34 cents in the first quarter of last year. Considering the dividend yield picture, Devon Energy’s yield of 6.64% is significantly higher than the 3.64% yield of the composite stocks belonging to the energy sector.
MPLX LP (MPLX - Free Report) is no exception among the leading midstream players to derive stable fee-based revenues since the partnership is the operator of midstream energy infrastructure and logistics assets. MPLX is also involved in services related to fuel distribution.
Looking at the distribution picture, distribution paid by MPLX in the three months ended Dec 31 last year was $1,345 million, signifying a considerable improvement from $742 million in the comparable period in 2020. The distribution yield of MPLX, with a Zacks Rank of 2, is hefty at 8.49%.
The Williams Companies, Inc. (WMB - Free Report) is the operator of pipeline assets spanning more than 30,000 miles. The Williams Companies generates stable cashflows as its midstream infrastructures handle 30% of the natural gas consumed daily in the United States.
The Williams Companies has a strong focus on creating long-term value for shareholders through the payment of attractive dividends. In 2022, Zacks #1 Ranked WMB projected annualized dividend payment of $1.70 per share, marking a 3.7% improvement from $1.64 in 2021. The dividend yield of WMB is handsome at 5.05%.