13 Best Natural Gas and Oil Dividend Stocks To Buy

1. Exxon Mobil Corporation (NYSE:XOM)

Number of Hedge Fund Holders: 81

Exxon Mobil Corporation (NYSE:XOM) ranks first on our list of the best dividend stocks from the oil and gas sector. In the first quarter of 2024, the company achieved a quarterly gross production exceeding 600,000 barrels of oil equivalent per day in Guyana and made the final investment decision for its sixth major development project. Guyana is one of the company’s key exploration areas, where oil production costs are lower, ranging between $25 to $35 per barrel. This cost is comfortably profitable for Exxon Mobil Corporation (NYSE:XOM) due to its larger size and scale compared to other oil exploration companies.

Exxon Mobil Corporation (NYSE:XOM) is well-positioned to thrive during an eventual downturn in the oil industry. Thanks to several years of profits, the company has strengthened its balance sheet. In Q1 2024, it generated $14.7 billion in operating cash flow and its free cash flow came in at over $10 billion. The company also distributed $3.8 billion to shareholders through dividends. In addition, the company maintains a relatively low level of debt, approximately $40 billion, while boasting a substantial cash flow of $33 billion. With a debt-to-EBITDA ratio of 0.58, debt should not be a significant concern for shareholders.

Exxon Mobil Corporation (NYSE:XOM), one of the best dividend stocks on our list, has been growing its dividends for the past 41 years. It offers a quarterly dividend of $0.95 per share and has a dividend yield of 3.36%, as of June 10.

With a collective stake value of over $5.5 billion, 81 hedge funds in Insider Monkey’s database owned positions in Exxon Mobil Corporation (NYSE:XOM), down from 85 in the previous quarter.

While we acknowledge the potential of energy companies, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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