Ranking the Safest Dividend Stocks in the Energy Sector Right Now

Many investors buy energy stocks for stable dividends. However, volatile commodity prices, high debt, or weak cash flows can drive some of those companies to reduce their payouts.

To determine if a dividend-paying energy stock is safe to buy in this choppy market, we should review its leverage, dependence on oil prices, and its payout ratio. Moreover, these stocks should ideally trade at a discount to the S&P 500 (SNPINDEX: ^GSPC).

Image source: Getty Images.

Let's take a look at three stocks that check all of those boxes: ExxonMobil (NYSE: XOM), Enterprise Products Partners (NYSE: EPD), and Brookfield Renewable (NYSE: BEPC).

The diversified energy giant: ExxonMobil

ExxonMobil is one of the largest integrated energy companies in the world. It owns upstream, midstream, and downstream assets in over 56 countries. It still gets most of its oil in the U.S., but it's been expanding aggressively in Asia, Africa, and South America.

ExxonMobil has raised its dividend annually for 43 consecutive years. Its forward yield of 2.5% might seem unimpressive, but its low trailing payout ratio of 53% gives it plenty of room for future hikes. It only needs the price of Brent crude -- currently near $100 per barrel -- to stay above $35 per barrel to cover its capex and dividends. It plans to increase its oil and gas production by nearly 3% annually through 2030.

Analysts expect ExxonMobil's adjusted EPS to grow 68% this year, but it still looks like a bargain at 15 times forward earnings. It should remain one of the safest ways to simultaneously generate passive income while profiting from higher oil prices.

The toll road operator: Enterprise Products Partners

Enterprise Products Partners is a midstream company that operates more than 50,000 miles of pipeline across 27 states. It's well-insulated from volatile commodity prices because it simply charges upstream and downstream companies "tolls" to use its infrastructure.

As long as natural gas, natural gas liquids (NGLs), crude oil, and other refined products keep flowing through its pipelines, Enterprise can generate plenty of cash to fund its distributions. It pays a high forward yield of 5.7%, and it's raised its payout for 28 consecutive years.

Enterprise is structured as a master limited partnership (MLP), so it actually blends a return of capital with its own cash to pay more tax-efficient distributions. In 2025, its operational distributable cash flow (DCF) easily covered its distributions with a coverage ratio of 1.7x.

Analysts expect Enterprise's earnings per unit (EPU) to rise 13% in 2026. At 13 times that estimate, it still looks like a screaming bargain for value-seeking income investors.

The renewable leader: Brookfield Renewable Corporation

Brookfield Renewable builds hydroelectric dams, wind farms, solar power plants, and other green energy projects across 25 countries. With an operational capacity of 47.3 GW and a pipeline of over 200 GW of renewable projects (including 85 GW of advanced-stage projects in active development), Brookfield is a great all-around investment in cleaner energy.

Brookfield Renewable generates roughly 90% of its revenue from fixed-price and inflation-linked contracts with a weighted-average duration of 12 years. It's already secured long-term renewable power agreements with AI-driven tech giants like Microsoft, Amazon, and Alphabet's Google, and that list will grow as the data center market expands.

Brookfield Renewable has raised its dividend annually ever since it was spun off from Brookfield Renewable Partners (NYSE: BEP), which holds the same assets but operates as an MLP, in 2020. In 2025, its funds from operations (FFO) of $2.01 per share easily covered its $1.49 per share in annual dividends. It plans to continue raising its payout by 5%-9% annually and pays a forward yield of 5.3%. It trades at just 15 times last year's FFO per share, making it a cheap, income-generating green energy play for patient investors.

Leo Sun has positions in Amazon and Brookfield Renewable. The Motley Fool has positions in and recommends Alphabet, Amazon, and Microsoft. The Motley Fool recommends Brookfield Renewable, Brookfield Renewable Partners, and Enterprise Products Partners. The Motley Fool has a disclosure policy.