4 Energy Stocks With 20+ Years of Consecutive Dividend Growth

The geopolitical conflict in the Middle East has once again shown that energy prices are highly volatile. That's the norm for the sector, not the exception, a fact that can make it hard for dividend investors to find attractive energy stocks. But some companies have proven they have what it takes to keep paying through the entire energy cycle.

If you are looking for reliable high-yield dividend stocks, Chevron (NYSE: CVX), ExxonMobil (NYSE: XOM), Enterprise Products Partners (NYSE: EPD), and Enbridge (NYSE: ENB) all deserve a deep dive. The shortest dividend streak on this list is 27 years!

Image source: Getty Images.

Exxon and Chevron give you everything

Chevron and Exxon are two of the world's largest energy companies. They are also highly reliable dividend stocks, with decades worth of annual dividend increases behind each one. Exxon's streak is a bit longer at 43 years, but Chevron's 38-year streak is hard to complain about. Right now, Chevron has the higher yield at 3.7%, while Exxon still offers a well-above-market 2.7% yield.

The big story here, however, is the businesses that back those yields and dividend streaks. Chevron and Exxon are both integrated energy companies, which means they provide investors exposure to the entire energy value chain, from the upstream (energy production) to the midstream (pipelines) to the downstream (chemical and refining). Their upstream operations have the biggest impact on financial results, but the midstream and downstream exposure helps to soften the large performance swings that often happen in the upstream.

Meanwhile, both companies operate in a very conservative fiscal manner. That is highlighted by their peer-leading debt-to-equity ratios of 0.2x for Exxon and 0.25x for Chevron. This allows both companies to lean on their balance sheets during energy market downturns, enabling them to continue supporting their businesses and dividends. And that will allow dividend lovers to sleep well at night knowing that their dividend checks will keep rolling in.

Enterprise and Enbridge let you cherry-pick the most reliable energy niche

The upstream and the downstream are both volatile, but the midstream tends to be rather boring. This is where both Enterprise and Enbridge operate, each owning giant North American energy infrastructure systems. They charge fees for the use of their assets, so the price of the commodities being moved isn't all that important to their financial results.

The benefit of this is clear in their dividend track records. Enterprise, a master limited partnership (MLP), has increased its distribution for 27 years, which is the shortest streak on this list, but basically as long as it has been public. Enbridge's dividend streak is 31 years in Canadian dollars. But what's really notable is their yields: Enterprise's is an ultra-high 5.7%, and Enbridge's is not far behind at 5%.

There is one caveat here. The yields these midstream giants offer will likely make up a large portion of an investor's return over time. They are, at best, slow-growing and steady giants. Dividend hikes are likely to edge out inflation over time, but not by much. So these are most appropriate for investors looking to maximize the passive income they generate today.

Don't ignore the energy sector

The on-again/off-again conflict in the Middle East has again shown that energy is a volatile sector. However, it has also shown how important energy is to the normal functioning of the global economy. Most investors should have some energy exposure in their portfolios. If you are a dividend lover, Chevron, Exxon, Enterprise, and Enbridge are four very strong options to consider given their impressive dividend histories. Your biggest decision will likely come down to how much direct energy exposure you are willing to take on.

Reuben Gregg Brewer has positions in Enbridge. The Motley Fool has positions in and recommends Chevron and Enbridge. The Motley Fool recommends Enterprise Products Partners. The Motley Fool has a disclosure policy.