5 Best Energy Dividend Stocks To Invest In

In this article, we discuss 5 best energy dividend stocks to invest in. If you want to read our detailed analysis of the energy sector and its outlook for this year, go directly to read 11 Best Energy Dividend Stocks To Invest In. 

5. EOG Resources, Inc. (NYSE:EOG)

Number of Hedge Fund Holders: 50
Dividend Yield as of February 25: 2.89%

EOG Resources, Inc. (NYSE:EOG) is an American energy company, based in Texas. The company is engaged in the exploration of hydrocarbons. In the fourth quarter of 2022, the company posted revenue of $6.7 billion, which showed an 11.3% growth from the same period last year. It generated over $1.7 billion in free cash flow during the quarter, which makes it one of the best energy dividend stocks on our list.

On February 23, EOG Resources, Inc. (NYSE:EOG) declared a quarterly dividend of $0.825 per share, consistent with its previous dividend. The company also announced a $1.0 per share in special dividends. The stock has a dividend yield of 2.89%, as of February 25.

Following the company’s recent quarterly earnings, Barclays maintained an Overweight rating on EOG Resources, Inc. (NYSE:EOG) in February, with a $145 price target.

As per Insider Monkey’s Q4 2022 database, 50 hedge funds owned stakes in EOG Resources, Inc. (NYSE:EOG), compared with 52 in the previous quarter. The collective value of these stakes is roughly $1.2 billion. Among these hedge funds, Harris Associates was the company’s leading stakeholder in Q4.

4. Devon Energy Corporation (NYSE:DVN)

Number of Hedge Fund Holders: 55
Dividend Yield as of February 25: 7.95%

An Oklahoma-based energy company, Devon Energy Corporation (NYSE:DVN) is next on our list of the best energy dividend stocks to invest in. On February 14, the company declared an 11% hike in its fixed dividend to $0.20 per share. It has been making uninterrupted dividend payments to shareholders since 1993. The stock’s dividend yield came in at 7.95% on February 25.

In the fourth quarter of 2022, Devon Energy Corporation (NYSE:DVN) reported revenue of $4.3 billion, up nearly 1% from the same period last year. The company’s operating cash flow for the quarter came in at $1.9 billion, up 18% from the prior-year period. Moreover, its free cash flow for FY22 reached its all-time high in the company’s 52-year operating history to $6 billion.

The number of hedge funds tracked by Insider Monkey owning stakes in Devon Energy Corporation (NYSE:DVN) grew to 55 in Q4 2022, from 51 in the previous quarter. The collective value of these stakes is over $823.5 million.

GoodHaven Capital Management mentioned Devon Energy Corporation (NYSE:DVN) in its Q2 2022 investor letter. Here is what the firm has to say:

“Our biggest dollar gainer within this period was Devon Energy Corporation (NYSE:DVN), a position which emanated from a takeover in early 2021 of our long time holding WPX Energy. We are sitting on a material (unrealized) gain from our cost and are now receiving material dividends thanks to Devon’s thoughtful fixed/variable dividend policy. Energy is now a hot sector for investors but we have had a material exposure for a long time. We remember a bit too well $40 oil, NEGATIVELY PRICED front-month oil contract, and what it’s like to own a company with leverage and negative free cash flow during such periods. Our desire to have our biggest portfolio exposures be high return, growing, reasonably predictable and moderately levered companies lead us to reduce our Devon exposure in the past. When the recent facts and circumstances for the industry changed and appeared supportive of healthy oil prices, we decided to maintain a sizable holding and more recently added to the position. At Devon’s Q1 dividend rate, which is mostly variable in nature, the shares now yield approximately 10% and our yield on our average cost is materially higher. In addition, we maintain additional energy exposure through our long-term (and successful) holding in Hess Midstream and less directly through TerraVest and Berkshire Hathaway’s energy investments.”

3. Chevron Corporation (NYSE:CVX)

Number of Hedge Fund Holders: 57
Dividend Yield as of February 25: 3.72%

Chevron Corporation (NYSE:CVX) is one of the world’s largest energy companies. In February, it revived talks with Algeria to allow it to take up energy explorations in the country. This step was taken to compete for natural gas in areas dominated by European firms.

Chevron Corporation (NYSE:CVX), one of the best energy dividend stocks, has been growing its dividends consistently for the past 36 years. The company offers a quarterly dividend of $1.51 per share and has a dividend yield of 3.72%, as of February 25.

At the end of December 2022, 57 hedge funds tracked by Insider Monkey reported owning stakes in Chevron Corporation (NYSE:CVX), worth over $32.2 billion collectively.

Diamond Hill Capital mentioned Chevron Corporation (NYSE:CVX) in its Q1 2022 investor letter. Here is what the firm had to say:

“Other top contributors in Q1 included multinational energy company Chevron Corp. (NYSE:CVX). The company benefited from increased energy demand as COVID-related economic restrictions eased in tandem with concerns regarding supply interruptions related to Russia’s invasion of Ukraine.”

2. ConocoPhillips (NYSE:COP)

Number of Hedge Fund Holders: 67
Dividend Yield as of February 25: 5.07%

ConocoPhillips (NYSE:COP) specializes in petroleum refineries and crude oil. The company is headquartered in Texas, US. Highlighting the company’s Q4 earnings, Barclays raised its price target on the stock in January to $160 with an Overweight rating on the shares.

On February 2, ConocoPhillips (NYSE:COP) declared a quarterly dividend of $0.51 per share, which remained consistent with its previous dividend. The company also announced a variable return of cash of $0.60 per share, which is payable on April 14. It has been regularly paying dividends to shareholders since 1993, which places it as one of the best energy dividend stocks on our list.

At the end of December 2022, 67 hedge funds tracked by Insider Monkey held stakes in ConocoPhillips (NYSE:COP), up from 64 in the previous quarter. These stakes have a consolidated value of roughly $3 billion.

ClearBridge Investments mentioned ConocoPhillips (NYSE:COP) in its Q4 2022 investor letter. Here is what the firm has to say:

“The risk-on environment supported by China reopening drove strong returns for the energy sector, despite underlying commodity prices falling from recent highs. In the portfolio, leading E&P company ConocoPhillips (NYSE:COP) was again among the top contributors; it maintains one of the best balance sheets in the industry and continues to execute well while benefiting from being a low-cost producer and growing liquefied natural gas demand. ConocoPhillips is also investing in field electrification and carbon capture across its portfolio, with ambitions to deliver oil production with industry-low CO2 intensity.”

1. Exxon Mobil Corporation (NYSE:XOM)

Number of Hedge Fund Holders: 79
Dividend Yield as of February 25: 3.29%

Exxon Mobil Corporation (NYSE:XOM) tops our list of the best energy dividend stocks to invest in. The company maintains a 40-year streak of consistent dividend growth, becoming a source of regular income for shareholders. It currently offers a quarterly dividend of $0.91 per share and has a dividend yield of 3.29%, as of February 25.

The number of hedge funds owning stakes in Exxon Mobil Corporation (NYSE:XOM) grew to 79 in Q4 2022, from 75 a quarter earlier, according to Insider Monkey’s Q4 data. These stakes have a consolidated value of over $7.1 billion. Among these hedge funds, GQG Partners was the company’s leading stakeholder in Q4.

You can also take a look at 13 Most Profitable Food Stocks and 13 High Growth Pharma Stocks that are Profitable

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