Want Decades of Passive Income? 3 Energy Stocks to Buy Right Now
Key Points
Oil giant ExxonMobil has demonstrated stability with 43 consecutive years of annual dividend growth.
Enbridge's fee-based model generates steady cash flows that are less affected by commodity price changes.
With a focus on natural gas, National Fuel Gas has achieved 55 consecutive years of dividend growth.
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If you're an investor looking to generate passive income from your portfolio, look no further than dividend stocks. These companies provide regular cash payouts, often quarterly, that can be a steady source of cash flow for investors.
However, not all dividend stocks are created equally. Some companies prioritize high dividend yields, which may not be sustainable in the long run. Others focus on growing their annual dividend payment at a steady rate, providing investors with reliable cash flow no matter what the economy throws at them.
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Companies in the energy sector can be an excellent source of dividends. These stocks can provide steady income and protection against inflation. If this appeals to you, three energy dividend stocks to scoop up today are ExxonMobil (NYSE: XOM), Enbridge (NYSE: ENB), and National Fuel Gas (NYSE: NFG).
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ExxonMobil
ExxonMobil is a giant in the oil and gas industry. The company operates an integrated business model, combining exploration and production (upstream) with refining and marketing fuels (downstream), which provides it with resilience against fluctuations in oil and gas prices. Its sound business and stellar capital management are evident from its annual dividend, which has grown every year for 43 consecutive years.
The company has aggressively shifted its portfolio to "advantaged assets," which have low production costs and high returns. It has also invested heavily in technology to maximize oil recovery and drill more efficiently than its peers. While falling oil and gas prices could hurt it in the short term, Exxon has fortified its position in the industry with low-cost assets that deliver strong returns, which should allow it to continue rewarding investors for years to come.
Enbridge
Enbridge operates as a midstream company in the oil and gas industry, focusing on transporting and distributing crude oil and liquids across North America. This business model differs from Exxon's in that Enbridge operates on a fee-based model, providing steady, long-term cash flows that are less affected by commodity prices.
The midstream company operates one of the largest crude oil and liquids networks, delivering about 6 million barrels per day (mmbpd). The company is also actively expanding its gas infrastructure to support the surging demand for gas power generation to fuel data centers.
Enbridge has done an excellent job raising its dividend payout for 31 consecutive years, and its future growth is supported by visible future earnings, making it another solid dividend stock to own today.
National Fuel Gas Company
National Fuel Gas Company is a diversified energy company focused on natural gas. The company has assets in New York and Pennsylvania and produces, transports, stores, and distributes natural gas from the Appalachian Basin. The company also operates a regulated utility segment, which helps provide it with stable, predictable cash flow.
The company's strong competitive position and balanced business across the natural gas value chain provide it with stability, which is a big reason it has increased its dividend payout for 55 consecutive years, making it the only energy-focused stock to earn Dividend King status.
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Courtney Carlsen has positions in ExxonMobil. The Motley Fool has positions in and recommends Enbridge. The Motley Fool has a disclosure policy.
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