9 Best Energy Dividend Stocks To Buy Now

1. Exxon Mobil Corp. (NYSE:XOM)

Number of Hedge Fund Investors: 81

With over four decades of consistent dividend increases, oil giant Exxon Mobil Corp. (NYSE:XOM) is the best dividend to buy in the energy sector according to hedge fund investors.  As of the end of the first quarter of 2024, 81 funds reported having stakes in Exxon Mobil Corp. (NYSE:XOM). The most notable stake in Exxon Mobil Corp. (NYSE:XOM) is owned by Ken Fisher, valued at over $3 billion.

In April, Exxon Mobil Corp. (NYSE:XOM) posted Q1 results. Adjusted EPS in the period came in at $2.06, missing estimates by $0.12. Revenue fell 4% year over year to $83.08 billion, beating estimates by $1.57 billion.

Madison Dividend Income Fund stated the following regarding Exxon Mobil Corporation (NYSE:XOM) in its first quarter 2024 investor letter:

“This quarter we are highlighting Exxon Mobil Corporation (NYSE:XOM) as a relative yield example in the Energy sector. XOM is a leading integrated oil and natural gas company. It has upstream assets that develop and produce oil and natural gas, along with downstream refining and chemical manufacturing assets. We believe it has attractive low-cost acreage in the Permian basin and has a sizeable growth opportunity in Guyana. Further, we think XOM has a sustainable competitive advantage due to size and scale, and its ability to integrate refining and chemical assets provides a low-cost advantage versus competitors.

Our thesis on XOM is that it will grow production volumes of oil and gas moderately over the next few years, while limiting excessive capital investment that plagued the industry from 2014-2020. Production growth will come from its 2023 acquisition of Pioneer Natural Resources, which is the largest producer in the Permian basin. XOM plans to double its Permian output by 2027, to 2 million barrels per day. Capital spending will be limited to $20-25 billion per year through 2027, which should allow for significant amounts of cash to be returned to shareholders including a $35 billion share repurchase program and continued dividend increases. Higher oil prices would provide a tailwind to our thesis but are not necessary. We think XOM can grow earnings and cash flow if oil prices remain above $60 per barrel…” (Click here to read the full text)

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