3 High-Yield Energy Stocks to Buy in February

Source The Motley Fool

Key Points

  • Enbridge is both an energy stock and a utility stock, offering stability and attractive income.

  • Energy Transfer is enjoying a nice AI tailwind.

  • Enterprise Products Partners offers a juicy distribution with growth expected to increase in 2027.

  • 10 stocks we like better than Enbridge ›

If you're seeking exceptionally juicy dividend yields, the energy sector is a great place to start your search. Here are three high-yield energy stocks to buy in February.

1. Enbridge

Enbridge (NYSE: ENB) offers a forward dividend yield of 5.6%. The company has increased its dividend for an impressive 30 consecutive years. It also continues to generate strong free cash flow to keep the dividends flowing.

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While Enbridge is rightly categorized as an energy stock, it's also a utility stock. In addition to operating over 18,000 miles of liquids pipelines and over 19,200 miles of natural gas pipelines, the company ranks as the largest natural gas utility by volume in North America. It has also expanded into renewable energy, with projects either in operation or under construction with a capacity to generate over 7.2 gigawatts of electricity.

JP Morgan (NYSE: JPM) recently downgraded Enbridge due to sluggish growth in its crude oil business. While the stock may not deliver tremendous growth, it should provide stability and reliable income.

2. Energy Transfer

If Enbridge's midstream business sounds appealing, you'll probably also like another pipeline stock -- Energy Transfer (NYSE: ET). This limited partnership (LP) operates over 140,000 miles of pipeline across the U.S. that transport crude oil, natural gas, natural gas liquids (NGLs), and refined products.

Energy Transfer's distribution yield of 7.3% should be a big plus for income investors. The boom in the construction of data centers hosting artificial intelligence (AI) systems is also providing a nice tailwind for the company. Energy Transfer has signed agreements to supply natural gas to multiple data center operators over the past 12 months, including CloudBurst, Fermi America (NASDAQ: FRMI), and Oracle (NYSE: ORCL).

A person welding a pipeline.

Image source: Getty Images.

3. Enterprise Products Partners

Enterprise Products Partners (NYSE: EPD) is another midstream leader that has been an income machine. Its distribution yield is roughly 6.3%. Enterprise Products Partners has also increased its distribution for 27 consecutive years.

This LP, like Energy Transfer, has growth opportunities related to AI. Enterprise Products Partners plans to capitalize on these opportunities, with around $4.8 billion of projects under construction. Several of these projects will begin operations in 2026.

Investors shouldn't count on stellar growth from Enterprise Products Partners this year, though. CEO Randy Fowler acknowledged in the recent quarterly earnings call that only "modest growth" is in store for 2026. However, management projects 10% earnings before interest, taxes, depreciation, and amortization (EBITDA) and cash flow growth in 2027.

Should you buy stock in Enbridge right now?

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JPMorgan Chase is an advertising partner of Motley Fool Money. Keith Speights has positions in Enbridge, Energy Transfer, and Enterprise Products Partners. The Motley Fool has positions in and recommends Enbridge, JPMorgan Chase, and Oracle. The Motley Fool recommends Enterprise Products Partners. The Motley Fool has a disclosure policy.

Disclaimer: For information purposes only. Past performance is not indicative of future results.
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