In this article, we are going to discuss the energy stocks with fat dividends.
After a promising start to the year, the energy industry has once again declined after finding itself right in the crosshairs of President Trump’s tariff war. At the time of writing this piece, the broader energy sector has fallen by 5.48% since the beginning of 2025, against declines of almost 10% by the overall market.
READ ALSO: 10 Best Oil Stocks to Invest in According to Billionaires
Short-sellers marginally increased their bets against oil and gas stocks last month, with short interest in the energy sector reaching 2.58%, compared to 2.52% in February. The most shorted industry within the sector was Oil & Gas Equipment & Services, primarily due to the tariffs imposed by the Trump administration on steel and aluminum imports. This is all despite the fact that global crude prices rose 4.5% in March. The sharp plunge in crude oil price in April, with the West Texas Intermediate (WTI) price currently hovering below $65, has only added to the sector’s problems.
However, even as crude prices decline and the growth in global oil demand slows down, an increasing number of fossil fuel companies remain committed to shareholders and have increased their returns to record levels. A report by Janus Henderson has revealed that operators in the energy sector distributed over $49 billion in dividends during the third quarter of 2024, up from $32.2 billion three years ago. According to Bloomberg, four of the world’s five oil supermajors even resorted to borrowing a combined $15 billion between July and September 2024 to fund share buybacks, underscoring their commitment to rewarding investors.
However, maintaining such high levels of payouts can only come from sustainable growth, which these energy giants have currently found in the form of natural gas. In contrast to oil, the benchmark US natural gas price at Henry Hub has surged by over 115% over the last year. Moreover, the US Energy Information Administration expects the US gas demand to reach record highs this year and the next, and a major factor driving this growth is the country’s LNG exports.
The United States of America is the largest LNG exporter in the world, with exports growing consistently over the last decade, from 0.5 Bcf/d in 2016 to 11.9 Bcf/d in 2024. The LNG sector has also received significant support from the Trump administration, further boosting these export figures this year. The European Union remains the top destination for American LNG, which has replaced nearly half of the Russian gas supply to the continent after the outbreak of war in Ukraine. Moreover, an increasing number of countries are now also looking to increase the imports of US LNG to reduce trade imbalances and put themselves in a better negotiating position with regard to President Trump’s tariffs. A great example is how Indian state-run GAIL has recently gone out to tender to buy an up to 26% stake in an LNG project in the United States, bundling the offer with a 15-year gas import deal and aiding New Delhi’s efforts to narrow its trade surplus with Washington.
With that said, here are the Best Dividend Stocks in the Energy Sector.
An aerial view of offshore rigs with oil storage tanks, reflecting the company’s marine infrastructure.
Our Methodology
To collect data for this article, we screened for companies operating in the energy sector and then picked out companies with the highest dividend yields as of April 18, 2025, and that have maintained their dividend policies over the last few years. The following are the Best Energy Stocks with High Dividend Yields.
At Insider Monkey, we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
10. ConocoPhillips (NYSE:COP)
Dividend Yield as of April 18: 3.51%
ConocoPhillips (NYSE:COP) is one of the world’s largest independent E&P companies based on oil and natural gas production and proved reserves.
ConocoPhillips (NYSE:COP) had a strong Q4 2024 as its revenue of $14.74 billion topped expectations by almost $515 million. The company’s adjusted EPS of $1.98 was also above estimates by $0.15. The oil and gas giant has significantly bolstered its position with the $22.5 billion acquisition of Marathon in November 2024, which added over 2 billion barrels of oil and gas resources with an average cost of supply below $30 to its portfolio. As a result, the company’s production rose 14.8% YoY to 2.183 million boe/d in Q4 2024.
ConocoPhillips (NYSE:COP) maintains a strong cash position, generating $20.3 billion in operational cash flow in FY2024. The company returned $9.1 billion to its shareholders in the form of buybacks and dividends, representing 45% of CFO and well above its 30% commitment. COP boasts a streak of 10 consecutive years of dividend growth and recently announced its ordinary dividend of $0.78 per share for Q1 of 2025, with plans to return $10 billion to its shareholders this year.
With 16 billionaire holders in the Insider Monkey database at the end of Q4 2024, ConocoPhillips (NYSE:COP) is included among the 25 Best Dividend Stocks to Buy According to Billionaires.
9. Exxon Mobil Corporation (NYSE:XOM)
Dividend Yield as of April 18: 3.7%
Exxon Mobil Corporation (NYSE:XOM) manages an industry-leading portfolio of resources and is one of the largest integrated fuels, lubricants, and chemical companies in the world. The company operates facilities or markets products around the globe and explores for oil and natural gas on six continents.
Exxon Mobil Corporation (NYSE:XOM) delivered an industry-leading financial performance in FY 2024, with $34 billion in earnings and $55 billion in cash flow from operations – its third-highest result in a decade despite softer market conditions. Moreover, the company reported record production in Guyana and the Permian basin, following its $60 billion acquisition of Pioneer Natural Resources last year. The oil major achieved production of 4.6 million barrels of oil equivalent per day in Q4 of 2024, up from 4.58 million in the previous quarter, and with a target to achieve close to 5.4 million boe/d in 2030.
Exxon Mobil Corporation (NYSE:XOM) is renowned for its commitment to shareholders, having distributed more than $125 billion in dividends and buybacks over the last five years, $30 billion more than its closest competitor. The company has increased its annual dividend for 42 consecutive years and recently announced a quarterly dividend of $0.99 per share for Q1 of 2025. Exxon has also discussed plans to repurchase $20 billion in shares annually through 2026.
