The 5 Best High-Yield Energy Stocks in the Vanguard High Dividend Yield ETF

The Vanguard High Dividend Yield ETF (NYSEMKT: VYM) currently holds 566 high-yielding dividend stocks. It owns stocks in every sector. The energy industry is a meaningful contributor, accounting for 8.3% of the fund's holdings.

Here are the five best high-yielding energy stocks held by the Vanguard High Dividend ETF.

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ExxonMobil

Oil behemoth ExxonMobil (NYSE: XOM) is the third-largest holding in the Vanguard High Dividend ETF at 2.3% of the fund's assets. The energy giant is one of the best dividend stocks in the world. Exxon recently increased its dividend by another 4%, extending its growth streak to 43 straight years, the longest in the oil patch and a milestone achieved by fewer than 5% of companies in the S&P 500. Its payout now yields 3.5%, more than triple the S&P 500's level of 1.1%.

ExxonMobil should have plenty of fuel to continue increasing its high-yielding dividend. The company recently raised its 2030 plan. Exxon now expects to produce an additional $25 billion in earnings and $35 billion of cash flow by 2030 without boosting its capital spending plan. That will give it more cash to return to shareholders through future dividend increases.

Chevron

Chevron (NYSE: CVX) has a 1.4% allocation in the Vanguard High Dividend ETF. The oil giant is another leading dividend oil stock. Chevron has raised its payment for 38 straight years, delivering peer-leading growth over the past decade. The oil company's payout currently yields 4.6%.

It's also in a strong position to continue increasing its dividend payment. Chevron expects to grow its free cash flow at a more than 10% compound annual rate through 2030. The company anticipates benefiting from recently completed projects in Kazakhstan and the Gulf of Mexico, as well as its acquisition of Hess, which will significantly boost its free cash flow next year. Meanwhile, longer-term drivers, such as offshore Guyana (acquired in the Hess deal), will help fuel growth through 2030 as new developments come online.

ConocoPhillips

ConocoPhillips (NYSE: COP) has a 0.5% allocation in the fund. The oil and gas company recently increased its dividend by 8%, pushing the yield up to 3.4%. ConocoPhillips has boosted its payout every year since resetting the level nearly a decade ago.

The energy company aims to deliver dividend growth within the top 25% of companies in the S&P 500 in the future. It should have ample fuel to deliver on that objective. ConocoPhillips expects a combination of cost-saving initiatives and three liquefied natural gas (LNG) projects to add $1 billion to its annual free cash flow total each year through 2028. Meanwhile, it expects the completion of its Willow oil project to add another $4 billion to its free cash flow total in 2029. That has ConocoPhillips on track to roughly double its free cash flow over the next several years.

Williams

Williams (NYSE: WMB) has a 0.4% allocation in the Vanguard ETF. The natural gas pipeline giant has paid dividends for 52 straight years. While it hasn't raised its payment every year, Williams has been growing the dividend at a mid-single-digit rate in recent years. Its payout currently yields 3.4%.

The pipeline company is investing heavily to support growing gas demand. It's spending over $4 billion on growth initiatives this year, including organic capital projects and a $1.9 billion investment in the development of a pipeline and related LNG facility. The company now has projects underway that should come online through the end of the decade, including three power innovation projects to support data centers. These growth projects should give Williams ample fuel to continue increasing its high-yielding dividend.

Phillips 66

Phillips 66 (NYSE: PSX) has a 0.3% allocation in this high-yield dividend fund. The refining and midstream giant has increased its payment every year since its formation in 2012, when ConocoPhillips spun off the company to its shareholders. It has grown its payout, which currently yields 3.4%, at an impressive 15% compound annual rate during that time frame.

The company has several expansion projects underway. Phillips 66 expects to spend $1.3 billion on growth capital projects in 2026, including building the Iron Mesa gas processing plant (first quarter 2027 in-service date) and the Coastal Bend NGL pipeline expansion (fourth quarter 2026 expected completion). Additionally, its chemicals joint venture with Chevron is building world-scale petrochemical facilities on the U.S. Gulf Coast (2026) and Qatar (early 2027). These investments will grow its cash flows in the coming years to support dividend increases. Phillips 66 has also proposed building a new NGL fractionator and the large-scale Western Gateway Pipeline with a partner, which could give it even more fuel to grow the dividend in the future.

Excellent energy dividend stocks

ExxonMobil, Chevron, ConocoPhillips, Williams, and Phillips 66 pay high-yielding dividends that have risen steadily over the years. That growth appears poised to continue. This combination of yield and growth makes them five of the best high-yielding energy dividend stocks in the Vanguard High Dividend ETF.

Matt DiLallo has positions in Chevron, ConocoPhillips, and Phillips 66. The Motley Fool has positions in and recommends Chevron and Vanguard Whitehall Funds-Vanguard High Dividend Yield ETF. The Motley Fool recommends ConocoPhillips and Phillips 66. The Motley Fool has a disclosure policy.