In this article, we discuss 10 energy dividend stocks with over 4% yield. If you want to see some more high yield energy picks, click 5 Energy Dividend Stocks with Over 4% Yield.
The short-term energy outlook for April by the US Energy Information Administration (EIA) remains uncertain, largely due to the prevalent Russia-Ukraine war. EIA’s forecast for GDP growth in 2022 is 3.4%, and 3.1% in 2023, lower than the growth of 5.7% in 2021. The Brent crude oil spot price rose $20 per barrel to $117 in March, as compared to February.
The Western sanctions on Russia have impacted the energy sector heavily, and supply uncertainty can further impact prices. To counteract the energy shortage, EIA projects that electricity generation from renewable sources will increase to 22% in 2022 from 20% in the prior year, owing to advancements in solar and wind generating potential.
The International Energy Agency reported on April 20 that the global demand for natural gas will fall by 0.3% in 2022, as a result of exorbitant prices and tight supply. Further downsides can also be expected since the market remains extremely volatile. To compensate for Russian gas, Europe has now turned towards LNG imported from Asia, and the sudden influx in demand has propelled Asian spot prices to an all-time high. On the other hand, OPEC on April 12 reduced its global oil demand forecast for 2022 by 480,000 b/d, pointing towards slower economic growth paired with the rampant omicron variant in China. According to OPEC, there was a surplus of oil in the first quarter of 2022.
Amid the volatile market backdrop, energy stocks remain one of the hottest picks of retail and institutional investors alike. It helps that these companies pay attractive dividends to shareholders as well. Some of the most notable energy stocks to watch include Exxon Mobil Corporation (NYSE:XOM), Occidental Petroleum Corporation (NYSE:OXY), and ConocoPhillips (NYSE:COP), among others discussed extensively ahead.
Our Methodology
We selected energy stocks with dividend yields over 4% as of April 20, 2022. We have mentioned the analyst ratings for each stock, as well as the hedge fund sentiment that surrounds the holdings. The list is ranked according to the dividend yield, from lowest to highest.
Energy Dividend Stocks with Over 4% Yield
10. Exxon Mobil Corporation (NYSE:XOM)
Number of Hedge Fund Holders: 71
Dividend Yield as of April 20: 4.01%
Exxon Mobil Corporation (NYSE:XOM) is an American multinational oil and gas company with a rich dividend history. The company has consecutively increased its dividend payouts for 39 years, and delivers a dividend yield of 4.01% as of April 20. Exxon Mobil Corporation (NYSE:XOM)’s latest quarterly dividend was declared on January 26, coming in at $0.88 per share, in line with previous. It was distributed to shareholders on March 10.
On April 20, Exxon Mobil Corporation (NYSE:XOM) announced that it sees a $4 trillion market opportunity for capturing and storing carbon dioxide underground by 2050, versus a $6.5 trillion market forecast for oil and gas in the same time frame. Exxon Mobil Corporation (NYSE:XOM) will pursue this opportunity in line with its lower carbon emission plans.
RBC Capital analyst Biraj Borkhataria upgraded Exxon Mobil Corporation (NYSE:XOM) from Sector Perform to Outperform on April 21, lifting the price target to $100 from $90. The analyst stated that Exxon Mobil Corporation (NYSE:XOM) is positioned to be one of the primary beneficiaries of a tight refined oil products market.
According to Insider Monkey’s Q4 data, 71 hedge funds reported owning stakes worth $5.3 billion in Exxon Mobil Corporation (NYSE:XOM). Rajiv Jain’s GQG Partners is the biggest stakeholder of the company, with 32.3 million shares worth approximately $2 billion.
Here is what First Eagle Investment Management has to say about Exxon Mobil Corporation (NYSE:XOM) in its Q2 2021 investor letter:
“Leading contributors in the First Eagle Global Fund this quarter included Exxon Mobil Corporation. The continued recovery in oil prices as economies reopen helped fuel another strong performance across the energy complex, including shares of Exxon Mobil. Exxon Mobil recently lost a proxy fight with an activist investor that took three of the company’s 12 board seats. While the press was focused on the investor’s concerns over Exxon Mobil’s long term energy transformation strategy, other factors fundamental to shareholder returns—like capital discipline and balance sheet management—were also at play.”
9. Phillips 66 (NYSE:PSX)
Number of Hedge Fund Holders: 41
Dividend Yield as of April 20: 4.11%
Phillips 66 (NYSE:PSX) was founded in 1875 and is headquartered in Houston, Texas. The energy company operates through four segments – Midstream, Chemicals, Refining, and Marketing and Specialties. Phillips 66 (NYSE:PSX)’s dividend yield on April 20 came in at 4.11%.
Piper Sandler analyst Ryan Todd on April 18 maintained an Overweight rating on Phillips 66 (NYSE:PSX) and raised the firm’s price target on the stock to $119 from $107 ahead of the Q1 results. Despite “some of the macro debate”, the analyst is “outright bullish” on refining, noting that supply challenges and distillate/jet yield maximization will drive robust summer gasoline margins.
In 2021, Phillips 66 (NYSE:PSX)’s total revenue for the year stood at $111.4 billion, compared to $64 billion in the previous year. Net income in 2021 came in at $1.3 billion, a strong rebound from the net loss of about $4 billion in 2020. Cash and cash equivalents in 2021 increased to $2.5 billion from $1.6 billion in the last year, which means that the company is likely to continue its dividend payments.
Phillips 66 (NYSE:PSX) on February 9 declared a $0.92 per share quarterly dividend, in line with previous. The dividend was paid on March 1, to shareholders of the company as of February 22.
According to the hedge funds tracked by Insider Monkey in Q4 2021, 41 funds were long Phillips 66 (NYSE:PSX), up from 34 funds in the earlier quarter. The total stakes owned in the fourth quarter amounted to $927.4 million. Israel Englander’s Millennium Management is the biggest position holder in Phillips 66 (NYSE:PSX), with more than 3 million shares worth $228.5 million.
Like Exxon Mobil Corporation (NYSE:XOM), Occidental Petroleum Corporation (NYSE:OXY), and ConocoPhillips (NYSE:COP), elite hedge funds are piling into Phillips 66 (NYSE:PSX) for exposure to the energy market.
8. BP p.l.c. (NYSE:BP)
Number of Hedge Fund Holders: 26
Dividend Yield as of April 20: 4.17%
BP p.l.c. (NYSE:BP) is a London-based energy company that operates worldwide, offering natural gas, biofuels, wind and solar power generating facilities, and de-carbonization solutions and services. BP p.l.c. (NYSE:BP) delivers a dividend yield of 4.17% as of April 20.
On February 10, BP p.l.c. (NYSE:BP) declared a quarterly dividend per share of $0.3276, in line with previous. The dividend was distributed on March 25, to shareholders of the company at the close of business on February 18.
JPMorgan analyst Christyan Malek on April 19 reiterated an Overweight rating on BP p.l.c. (NYSE:BP) and raised the firm’s price target on the shares to 500 GBp from 480 GBp.
BP p.l.c. (NYSE:BP)’s revenue for 2021 came in at $156.7 billion, an increase of 48.37% from the prior year’s revenue of $105.6 billion. Net income in 2021 stood at $7.5 billion, a sharp rebound from the 2020 net loss of $20.3 billion.
According to Insider Monkey’s fourth quarter database, 26 hedge funds held long positions in BP p.l.c. (NYSE:BP), compared to 29 funds in the prior quarter. Elite funds in Q4 collectively held stakes worth $1.2 billion. Ken Fisher’s Fisher Asset Management is the largest shareholder of the company, with 13.7 million shares valued at more than $367 million.
7. The Williams Companies, Inc. (NYSE:WMB)
Number of Hedge Fund Holders: 38
Dividend Yield as of April 20: 4.73%
The Williams Companies, Inc. (NYSE:WMB) was founded in 1908 and is headquartered in Tulsa, Oklahoma. It is an energy infrastructure company in the United States, specializing in natural gas pipelines, natural gas gathering and processing, crude oil production handling, and transportation assets.
On March 17, Mizuho analyst Gabriel Moreen reiterated a Buy recommendation on The Williams Companies, Inc. (NYSE:WMB) and raised the firm’s price target on the shares to $35 from $33. The company has “rapidly bolstered” its Haynesville presence, which remains a top gas basin to meet production demand, the analyst told investors in a research thesis.
The Williams Companies, Inc. (NYSE:WMB) reported a full-year revenue of $10.7 billion in 2021, up from $7.7 billion in 2020. The 2021 net income stood at $1.5 billion, compared to the prior year income of $211 million in 2020. The cash equivalents increased in 2021 to $1.68 billion from $142 million in the last year.
The Williams Companies, Inc. (NYSE:WMB) declared on February 7 a $0.425 per share quarterly dividend, a 3.7% increase from its prior dividend of $0.410. The dividend was distributed on March 28, for shareholders of record on March 11. The Williams Companies, Inc. (NYSE:WMB) delivers a dividend yield of 4.73% as of April 20.
Among the hedge funds tracked by Insider Monkey, 38 funds were bullish on The Williams Companies, Inc. (NYSE:WMB) in the December quarter, holding combined stakes worth $498.2 million. Mason Hawkins’ Southeastern Asset Management is the biggest position holder in the company, with 7.2 million shares valued at $188.7 million.
Here is what ClearBridge Investments Global Infrastructure Value Strategy has to say about The Williams Companies, Inc. (NYSE:WMB) in its Q4 2021 investor letter:
“On a regional level, the Strategy’s largest exposure is in the U.S. and Canada (58%) consisting of regulated and contracted utilities (31%) and economically sensitive user-pays infrastructure (27%). During the quarter we initiated new positions in U.S. energy infrastructure company Williams Companies. With supply chain issues, higher housing costs, higher commodity prices and producer price inflation remaining square in the sights for 2022, we think higher inflation is a risk for global markets. We expect growth to slow to trend or below by mid-2022 and U.S. Treasury yields to rise, which will mean a continuation of negative real bond yields. Additional forecast volatility and therefore market uncertainty will arise as new COVID-19 variants appear and circulate. However, with high levels of vaccination across the developed world and less propensity for mobility restrictions and lockdowns, we expect the economic implications to be limited.
6. TC Energy Corporation (NYSE:TRP)
Number of Hedge Fund Holders: 16
Dividend Yield as of April 20: 4.98%
TC Energy Corporation (NYSE:TRP) is based in Calgary, Canada, operating as an energy infrastructure company in North America. The company has five segments – Canadian Natural Gas Pipelines, U.S. Natural Gas Pipelines, Mexico Natural Gas Pipelines, Liquids Pipelines, and Power and Storage.
On February 15, TC Energy Corporation (NYSE:TRP) declared a C$0.90 per share quarterly dividend, a 3.4% increase from its prior dividend of C$0.87. The dividend is payable on April 29, to shareholders of record on March 31. The dividend yield on April 20 stood at 4.98%.
Scotiabank analyst Robert Hope on April 13 maintained an Outperform rating on TC Energy Corporation (NYSE:TRP) and raised the firm’s price target on the stock to C$78 from C$72.
According to Insider Monkey’s Q4 database, 16 hedge funds were bullish on TC Energy Corporation (NYSE:TRP), with collective stakes worth $119.5 million, compared to 15 funds in the earlier quarter, holding stakes in TC Energy Corporation (NYSE:TRP) valued at $84 million. Robert Richards’ Heathbridge Capital Management is a prominent shareholder of the company, with 635,465 shares valued at $29.4 million.
In addition to Exxon Mobil Corporation (NYSE:XOM), Occidental Petroleum Corporation (NYSE:OXY), and ConocoPhillips (NYSE:COP), TC Energy Corporation (NYSE:TRP) is a notable energy stock to look out for.
Click to continue reading and see 5 Energy Dividend Stocks with Over 4% Yield.
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Disclosure: None. 10 Energy Dividend Stocks with Over 4% Yield is originally published on Insider Monkey.
