Want Decades of Passive Income? 3 Energy Stocks to Buy Right Now

Are you looking to generate passive income from your portfolio? If so, dividend stocks are for you. Investing in high-quality, dividend-paying companies gives you a share of established companies that pay investors a share of their earnings over time.

While some companies optimize for high payouts, their dividends can fluctuate widely and are far from reliable. By investing in companies that consistently raise their annual dividend payments, you benefit from predictable passive income and also lower volatility, as these companies tend to handle market drawdowns better than non-dividend-paying companies.

If this sounds appealing to you, here are three dividend energy stocks that are smart buys today.

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ExxonMobil: 43 consecutive years of raising its annual dividend

ExxonMobil (NYSE: XOM) is a major player in the oil and gas industry that has grown its dividend payout for 43 consecutive years. Last year, the company paid out $17 billion in dividends to shareholders, making it one of the largest dividend payers in the S&P 500 index. It returned another $20 billion to shareholders through share repurchases.

The oil giant's long history of returning capital to shareholders is a testament to its integrated business model, which operates across the oil and gas value chain. ExxonMobil strategically focuses on "advantaged" assets, or high-quality assets that are characterized by low operating costs, low emissions, and high returns on investment. These advantaged assets are projected to make up 65% of its upstream production by 2030.

The company is ruthless with its energy portfolio, continuously evaluating its assets to determine whether it can divest lower-performing ones and add higher-performing advantaged ones. Since 2019, the company has divested $25 billion in assets and captured $15 billion in cumulative structural cost savings.

Looking ahead, ExxonMobil stands to benefit from elevated oil prices as the conflict with Iran lingers. The company projects that upstream production will grow to 4.9 million oil-equivalent barrels per day (Moebd) in 2026 and reach approximately 5.5 Moebd by 2030. Oil markets remain tight, and ExxonMobil has done an excellent job rewarding shareholders for decades, making it a top dividend stock for investors today.

NextEra Energy: 32 consecutive years of raising its annual dividend

NextEra Energy (NYSE: NEE) operates as a massive electric utility company through Florida Power & Light, and as a renewable energy business, NextEra Energy Resources. The company has a strong track record of increasing its dividend payout, having done so every year for the past 32 years, thanks to its regulated utility business that provides visibility into future growth.

The company recently made headlines with its acquisition of Dominion Energy in an all-stock transaction announced in mid-May. The move would create the world's largest regulated electric utility company, serving 10 million customers across Florida, Virginia, North Carolina, and South Carolina. The move could face some regulatory challenges, but management expects to close the transaction in 12 to 18 months.

Looking forward, management projects the company's earnings per share (EPS) for this year will be between $3.92 and $4.02, targeting the higher end of the range. The company expects to grow dividends per share by about 10%. It continues to see solid growth and believes it will finalize a deal with one large-load data center customer by the end of this year. For investors seeking passive income and growth upside, NextEra Energy is an excellent choice.

Air Products and Chemicals: 44 consecutive years of raising its annual dividend

Air Products and Chemicals (NYSE: APD) is another highly reliable dividend stock. The company, which specializes in industrial gases and chemicals, has paid a dividend every year since 1954 and raised its payout for each of the past 44 years.

What makes Air Products a reliable dividend stock is its steady business, secured by 15- to 20-year contracts, which provides excellent visibility into future earnings. Not only that, as one of only a few major players in its industry, it benefits from high barriers to entry and pricing power, giving it a robust competitive advantage.

Air Products has done a good job of de-risking its business and exercising cost discipline. In recent years, it has restricted and eliminated lower-margin segments, ensuring steady profitability to help fund its growing dividend. The company is also pivoting toward clean energy production, investing billions of dollars in green hydrogen production in Saudi Arabia and blue hydrogen production and carbon capture in Louisiana and Canada.

Disruptions in the Middle East have had a significant effect on helium prices, including at Qatar's Ras Laffan energy complex, which controls 30% of global helium production. The disruption has reversed the decline in helium prices, which had been falling coming into this year amid helium oversupply. On top of this, higher oil prices and supply constraints have driven chemical prices higher, and APD's pricing power has enabled its North American refining and chemical segments to perform well.

While its industry is volatile, Air Products has a proven track record of rewarding investors, making it another reliable income stock to add to your portfolio today.

Courtney Carlsen has positions in ExxonMobil. The Motley Fool has positions in and recommends NextEra Energy. The Motley Fool has a disclosure policy.