We recently published a list of the 12 Best Oil and Gas Dividend Stocks According to Billionaires. In this article, we are going to take a look at where Shell plc (NYSE:SHEL) stands against other best oil and gas dividend stocks to invest in according to billionaires.
The United States of America is now producing more oil than any country in history. The country’s oil and gas operators produced more than 13.49 million barrels per day (bpd) of crude in December 2024, an all-time high rate of production. Oil production in America has increased by almost 50% over the last decade, and the US Energy Information Administration (EIA) now expects American crude oil production to average 13.59 million bpd in 2025, up from its previous estimate of 13.55 million bpd. But at the same time, the country’s production is at risk of decline due to falling Brent prices, which are expected to average around $74 this year and then fall further to about $66 in 2026.
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Another major problem for the US oil and gas industry is that the country’s largest oil field is flagging and may be nearing peak output. The Permian Basin led the US shale revolution and was responsible for almost half of the country’s overall production in December. However, relentless drilling over the last two decades has exhausted the oilfield’s core, and shale executives now expect oil production growth from the Permian to slow by around 25% to 250,000 to 300,000 bpd this year.
Oil and gas executives are also irked by the tariff policies adopted by the Trump administration, as the constant uncertainty is now threatening their drilling plans. A recently published survey by the Federal Reserve Bank of Dallas has revealed that oil executives are discontent with President Trump’s administration, and nearly a third even said that their business outlook had worsened since the end of 2024. Moreover, the imposition of the 25% tariff on steel and aluminum has already led to an estimated 4% increase in costs for drilling a well.
However, despite all the aforementioned issues and declining margins, the country’s oil and gas 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. However, to maintain such high levels of payout, the industry will need to shift focus to its second major source of revenue – natural gas.
Unlike crude oil, the benchmark US natural gas price at Henry Hub has surged by over 114% over the last year, thanks to slowing output in 2024, booming LNG exports, and fast-depleting inventories during the coldest winter in six years. The EIA expects the US gas demand to reach record highs this year and next, and it has forecasted the country’s gas output to surge to 105.2 billion cubic feet per day (bcfd) in 2025, up from 103.2 bcfd last year and a record 103.6 bcfd in 2023.
It is worth mentioning that despite the industry’s recent decline in earnings, Warren Buffett’s Berkshire Hathaway has invested hundreds of millions of dollars in an oil and gas giant over the last few months. The Oracle of Omaha has a knack for dividends as around 80% of his portfolio is concentrated in dividend stocks, so the recent investment could be a reflection of his confidence in the sector’s payout potential.
A gas refinery lit up against the night sky, showing the scale of the company’s petrochemical operations.
Our Methodology:
To collect data for this article, we observed various companies working in the oil and gas sector and then picked out companies with the highest dividend yields as of March 28, 2025, and ranked them by their number of billionaire investors according to the Insider Monkey database as of Q4 2024. Following are the Best Oil and Gas Dividend Stocks According to Billionaires.
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).
Shell plc (NYSE:SHEL)
Number of Billionaire Holders: 14
Dividend Yield as of March 28: 3.79%
Shell plc (NYSE:SHEL) is a global group of energy and petrochemical companies, employing 103,000 people and with operations in more than 70 countries. The company is also the number one global lubricant supplier, as well as the top player in the rapidly expanding LNG sector.
Shell plc (NYSE:SHEL) had a tough Q4 2024 as it reported a profit of $3.66 billion, the lowest quarterly profit in the last 3 years. As a result, the oil and gas giant’s adjusted EPS of $1.18 fell below expectations by $0.31, and its quarterly revenue of $66.28 billion also missed estimates by over $5.5 billion. Despite the tough business environment, Shell generated an operating cash flow of $54.7 billion and a free cash flow of $39.5 billion for the full year 2024. It distributed $22.6 billion to its shareholders during the year, representing 41% of its total free cash flow. Moreover, the company’s continued focus on simplification helped to deliver over $3 billion in structural cost reductions since 2022, meeting its target ahead of schedule.
In January, Shell plc (NYSE:SHEL) announced a 4% increase in its dividends and another $3.5 billion buyback program, making this the 13th consecutive quarter of at least $3 billion of buybacks. According to analysts at Barclays, Shell may increase its dividend by 10%-20% as early as 2026 while keeping its $14 billion share buyback program intact through this year.
Overall, SHEL ranks 5th on our list of the best cannabis stocks to buy according to billionaires. While we acknowledge the potential for SHEL to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than SHEL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
