At around $74 per barrel, crude prices are more than 13% lower than the 2024 highs reached in April, primarily due to lackluster gasoline demand and sluggish consumption growth in China and Europe, coupled with rising U.S. shale production. Meanwhile, natural gas is trading below $3 on high production and a mild winter that led to bloated inventories.

Given the current state of affairs in the energy sector, it seems a wise investment strategy to search for stocks that provide a solid level of defense and often come with dividend payouts. A group of stocks that fulfill these criteria are the large caps — defined as companies with a market capitalization of $10 billion or more.

The Williams Companies (WMB Quick QuoteWMB - Free Report) , Chevron (CVX Quick QuoteCVX - Free Report) and Canadian Natural Resources (CNQ Quick QuoteCNQ - Free Report) stand out as compelling choices for investors seeking large-cap energy exp

Why Large Caps?

These companies possess strong financial positions and established reputations, and enjoy extensive analyst coverage. Moreover, their consistent dividend payments make them popular among income-oriented investors. Investors seeking reliability and a solid track record will find these large-cap companies appealing.

While large-cap companies may offer less growth potential compared to their smaller counterparts, they compensate with a lower level of price volatility. This characteristic makes them an excellent choice for investors who prefer a steadier investment approach, free from drastic commodity price swings.

Our Choices

Williams Companies: Founded in 1908, Oklahoma-based The Williams Companies is a premier energy infrastructure provider in North America. The company’s core operations include finding, producing, gathering, processing, and transporting of natural gas and natural gas liquids.

The Tulsa, OK-based WMB beat the Zacks Consensus Estimate for earnings in each of the last four quarters, the average being 10.7%. Williams has a market capitalization of roughly $49.9 billion.

A major incentive for holding the WMB stock is dividend. With a quarterly payout of 47.50 cents, shares currently yielding 4.6% annually, well above the Zacks Oil/Energy sector average of 3.7%. Reflecting a shareholder-friendly nature, the Zacks Rank #3 (Hold) company has grown its payout by more than 4% over the last five years.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Chevron: Based in San Ramon, CA, Chevron is one of the largest publicly traded oil and gas companies in the world, which participates in every aspect related to energy — from oil production to refining and marketing.

The Zacks Consensus Estimate for 2024 earnings of Chevron indicates 3.4% growth. The #3 Ranked company has a market capitalization of roughly $290.2 billion.

With a quarterly payout of $1.63 per share, CVX stock has a 4.2% dividend yield, above the generous sector average and significantly over the S&P 500’s 1.3% average.

Canadian Natural Resources: Established in 1973, Calgary-based Canadian Natural Resources is one of the largest independent energy companies in Canada. The #3 Ranked company boasts a diversified portfolio of crude oil (heavy as well as light), natural gas, bitumen and synthetic crude oil.

CNQ is valued at some $78.5 billion. The Canadian energy behemoth has a trailing four-quarter earnings surprise of roughly 5.5%, on average.

CNQ pays out a quarterly dividend of C$1.05, which gives it a 4.3% yield at the current stock price.