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.
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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.
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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.
8. Valero Energy Corporation (NYSE:VLO)
Dividend Yield as of April 18: 4.11%
Next on our list of the Best Energy Dividend Stocks is Valero Energy Corporation (NYSE:VLO), the largest independent petroleum refiner in the world and a leading producer of low-carbon transportation fuels. The company has 15 refineries in the US, Canada, and the UK, with a total throughput capacity of approximately 3.2 million barrels per day.
Despite a tough business environment for the refining sector, Valero Energy Corporation (NYSE:VLO) topped forecasts in Q4 2024. The company posted an adjusted EPS of $0.64, far above analysts’ estimates of $0.06. The quarterly revenue of $30.76 billion also beat expectations by $733.14 million, despite being down 13.15% YoY. VLO’s refining segment reported operating income of $437 million for Q4 2024, compared to $1.6 billion for the same period in 2023. Meanwhile, the renewable diesel segment posted strong growth, reporting $170 million of operating income for the quarter, up by 102% YoY.
Despite the setbacks, Valero Energy Corporation (NYSE:VLO) returned $4.3 billion to shareholders in 2024, representing a strong payout ratio of 78%. The company increased its quarterly cash dividend by 6% in January, further demonstrating its strong commitment to shareholders and placing it among the 13 Best Natural Gas and Oil Dividend Stocks To Buy.
7. Kinder Morgan, Inc. (NYSE:KMI)
Dividend Yield as of April 18: 4.24%
Kinder Morgan, Inc. (NYSE:KMI) is one of the largest energy infrastructure companies in North America. The company has an interest in or operates approximately 79,000 miles of pipelines and 139 terminals.
Kinder Morgan, Inc. (NYSE:KMI) had a mixed Q1 2025 as its revenue of $4.24 billion topped expectations by $215 million, besides being up by 10.39% YoY. However, the company’s adjusted EPS of $0.34 narrowly missed estimates by $0.02. This was primarily due to weaker earnings at its products pipelines segment and an 18.2% rise in total operating costs. KMI also expanded its project backlog by approximately $900 million in Q4 2024, taking the total backlog to $8.8 billion after adjusting for the projects placed in service. The company maintains a strong balance sheet, ending the quarter with a Net Debt-to-Adjusted EBITDA ratio of 4.1 times. It also generated cash flow from operations of $1.2 billion and $0.4 billion in free cash flow after capital expenditures.
Kinder Morgan, Inc. (NYSE:KMI) paid dividends of around $650 million in the first three months of 2025 and recently announced a quarterly dividend of $0.2925 per share for Q1, marking a 2% increase YoY.
6. Diamondback Energy, Inc. (NASDAQ:FANG)
Dividend Yield as of April 18: 4.51%
Diamondback Energy, Inc. (NASDAQ:FANG) is a Texas-based independent oil and natural gas company, focused on the acquisition, development, exploration, and exploitation of unconventional, onshore oil and natural gas reserves in West Texas. The company completed its merger with Endeavor Energy Resources last year, creating a leading operator focused on the Permian Basin.
Diamondback Energy, Inc. (NASDAQ:FANG) had a strong Q4 2024 as its adjusted EPS of $3.64 topped market expectations by $0.26. The company’s revenue also grew by a significant 66.56% YoY to $3.71 billion, beating estimates by $161.67 million. Diamondback’s net cash provided by operating activities was $6.4 billion in FY 2024, while its free cash flow for the year came in at $3.6 billion.
Diamondback Energy, Inc. (NASDAQ:FANG) continues to expand its portfolio and announced earlier this year that it has entered into a definitive purchase agreement to acquire certain subsidiaries of Double Eagle IV Midco LLC. The deal, valued at just over $4 billion, added 27,000 barrels per day of net oil production plus 40,000 net acres in the Midland Basin of the Permian.
Diamondback Energy, Inc. (NASDAQ:FANG) has been consistently growing its dividend for the last few years and recently increased its quarterly dividend by 11.1% to $1 per share.
5. Chevron Corporation (NYSE:CVX)
Dividend Yield as of April 18: 4.96%
Chevron Corporation (NYSE:CVX) manufactures and sells a range of high-quality refined products, including gasoline, diesel, marine and aviation fuels, premium base oil, finished lubricants, and fuel oil additives. The oil and gas giant owns five US fuel refineries and boasts a network of Chevron and Texaco service stations.
Chevron Corporation (NYSE:CVX) posted an adjusted EPS of $2.06 in Q4 2024, narrowly missing expectations by $0.05 after the company reported its first quarterly refining loss in four years. However, CVX’s revenue increased by 10.7% YoY to $52.23 billion, beating estimates by $3.82 billion. Notably, the company increased its worldwide and US production by 7% and 19%, respectively, to record levels in 2024. Chevron also generated $31.5 billion in operating cash flow and $15 billion in free cash flow in FY 2024, ending the year with a net debt ratio of 10%.
Chevron Corporation (NYSE:CVX) maintains a 38-year streak of consistent dividend growth, thanks to its solid business model and commitment to its shareholders. The oil and gas giant returned a record $27 billion in cash to its shareholders in 2024 and increased its quarterly dividend by 4.9% to $1.71 per share in January.
4. Canadian Natural Resources Limited (NYSE:CNQ)
Dividend Yield as of April 18: 5.69%
Canadian Natural Resources Limited (NYSE:CNQ) is one of the largest independent crude oil and natural gas producers in the world, continuing operations in its core areas located in Western Canada, the UK portion of the North Sea, and Offshore Africa.
Canadian Natural Resources Limited (NYSE:CNQ) missed forecasts in Q4 2024 as its EPS of $0.66 fell below market expectations by $0.03. That said, the company achieved a record quarterly average production of 1.47 million boe/d during the quarter, consisting of record liquids production of 1.09 million bbl/d and record natural gas production of 2,283 MMcf/d. CNQ also closed the acquisition of Chevron’s Alberta assets in December 2024, which are expected to contribute significantly to its cash flow in the future. The company also generated almost $4.5 billion in free cash flow in FY 2024 and maintains a policy to allocate at least 60% of it to shareholders.
Canadian Natural Resources Limited (NYSE:CNQ) increased its dividend for 25 consecutive years with a CAGR of 21% over the period. The oil and gas company returned approximately $7.1 billion to shareholders in 2024, including dividends and share repurchases, and approved a 4.4% increase in its quarterly dividend in March.
3. Enbridge Inc. (NYSE:ENB)
Dividend Yield as of April 18: 5.86%
Enbridge Inc. (NYSE:ENB) is a midstream energy company that focuses on transporting and distributing oil, natural gas, and natural gas liquids. The Canadian company moves about 40% of the crude oil produced in North America.
Enbridge Inc. (NYSE:ENB) had a strong Q4 2024 as its revenue grew by 36.32% YoY to $11.44 billion and surpassed expectations by a hefty $6.07 billion. The company’s adjusted EPS of $0.53 was also above estimates by $0.01. ENB added over $8 billion of organic projects to its backlog in 2024 and even closed the acquisition of three premier US natural gas utilities, creating the largest gas utility franchise in North America. Moreover, the company managed to achieve its financial guidance for the 19th consecutive year, demonstrating the stability and predictability of its business.
Enbridge Inc. (NYSE:ENB) generated full-year distributable cash flow of $12 billion in 2024, up 6% YoY. The midstream energy giant has paid dividends for more than 70 years, while increasing its payout for the last 30 years in a row. ENB offers a quarterly dividend of C$0.9425 per share and is included in our list of the 15 Best Low Priced Dividend Stocks to Buy Now.
2. BP p.l.c. (NYSE:BP)
Dividend Yield as of April 18: 6.85%
BP p.l.c. (NYSE:BP) is a British multinational company recognized worldwide for quality gasoline, transport fuels, chemicals, and alternative sources of energy such as wind and biofuels.
BP p.l.c. (NYSE:BP) had a tough Q4 2024 as its EPS of $0.44 fell short of expectations by $0.02, primarily due to weaker refining margins and fluctuating oil markets. The company’s revenue of $45.75 billion also missed estimates by $1.2 billion, besides being down 12.3% YoY. BP’s operating cash flow for FY 2024 came in at $7.43 billion, a 20.8% drop from 2023.
Despite the challenges, BP p.l.c. (NYSE:BP) raised its dividend per ordinary share by 10% and delivered $7 billion of share buybacks in 2024. The embattled energy company announced a $1.75 billion share buyback for Q4, with a dividend per ordinary share of $0.08.
To help improve its profitability, BP p.l.c. (NYSE:BP) has planned to cut investment in renewable energy to refocus on oil and gas. The company announced an oil discovery off the US Gulf coast just last week and expects global production to reach 2.3 million to 2.5 million boe/d by the end of the decade, with potential to grow through 2035.
1. Enterprise Products Partners L.P. (NYSE:EPD)
Dividend Yield as of April 18: 6.9%
Topping our list of Energy Stocks with Fat Dividends is Enterprise Products Partners L.P. (NYSE:EPD), one of the largest publicly traded partnerships and a leading North American provider of midstream energy services to producers and consumers of natural gas, NGLs, crude oil, refined products, and petrochemicals.
Enterprise Products Partners L.P. (NYSE:EPD) had a strong Q4 2024 as its adjusted EPS of $0.74 topped market expectations by $0.04. The company’s revenue of $14.2 billion was also above estimates by $74.57 million, despite being down 2.88% YoY. EPD posted record midstream volumes in 2024, due to natural gas and NGLs volume growth in the Permian Basin. The company’s distributable cash flow for FY 2024 came in at a record $7.8 billion, up from $7.6 billion in 2023. Moreover, EPD revealed that it expects to complete $6 billion of major organic growth projects in 2025, which should contribute significantly to its cash flow.
Enterprise Products Partners L.P. (NYSE:EPD) paid out approximately $4.8 billion in cash distributions to limited partners in 2024, resulting in a payout ratio of 55%. The company announced its 27th consecutive annual dividend increase in January 2025 and currently pays a quarterly dividend of $0.535 per share.
Overall, Enterprise Products Partners L.P. (NYSE:EPD) ranks first on our list of the best energy stocks with fat dividends. While we acknowledge the potential of EPD as an investment, our conviction lies in the belief that some deeply undervalued dividend stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for a deeply undervalued dividend stock that is more promising than EPD but that trades at 10 times its earnings and grows its earnings at double digit rates annually, check out our report about the dirt cheap dividend stock.
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