In this article we are going to look at the ten best energy dividend stocks to invest in. You can skip our analysis of the energy sector and go to Top 5 Energy Dividend Shares to Invest in.
The energy supply experienced its day as oil prices jumped to their highest levels in more than a year on March 5 after OPEC countries agreed not to increase oil supplies in April and to maintain their wait-and-see mode as the world economy is slowly beginning to recover. Major oil producer Saudi Arabia has agreed to maintain its voluntary production cut until April. Goldman Sachs raised its Brent crude estimate to $ 75 per barrel in the second quarter and $ 80 for the third quarter, while UBS also raised its forecast to $ 75 per barrel for Brent and $ 72 for WTI in the second half. of the year.
Should you buy energy supplies in 2021?
Investments in the energy sector have become difficult as a result of the rapidly changing trends. The world is moving away from carbon, and this transition is creating anxiety among energy investors. The coronavirus crisis has also exacerbated problems for the industry as demand for oil and gas has fallen sharply around the world. But the energy sector is evergreen for investment because human economic activity is industry dependent. As the world returns to normal after the availability of coronavirus vaccines and declining COVID-19 cases, the energy supply will recover. According to a report by the US Energy Information Administration, for example, energy consumption in aviation would return to its pre-COVID levels by 2030.
Another concern in the market over the energy sector is the increasing tide of revolution for green energy. Large energy companies are already preparing for this inevitable change. Several oil and gas companies have launched billions of dollars in funds to speed up their transition to clean energy. Duke Energy, for example, has set a goal of achieving carbon emissions by 2050. Similar targets have been set by Exxon, Xcel, Southern Company and several other oil and gas companies. Earlier this year, Canadian green energy company Eavor Technologies announced a $ 40 million deal led by BP Ventures and Chevron Technology Ventures.
Choosing the best energy dividend stocks
While we have chosen the best energy dividend stocks to invest in, we have given preference to the energy companies that have consistently increased their dividends over the past few years. Income investors need to focus on the performance of dividend-paying companies rather than returns. If a company’s return is extraordinarily high, it shows that it is not investing much in its future projects and is focusing more on returns from shareholders, which can only be attractive in the short term. In contrast, companies that have consistently increased their dividends over the past 5-15 years are expected to continue to do so. Investing in these dividend companies will minimize uncertainty and ensure regular dividend checks.
The selection of top dividend companies that can ensure that regular income becomes more important after the COVID-19 crisis. Financial volatility causes even hedge funds to struggle to maintain their profits. The industry has been affected in the last decade, while its hedged returns have not been able to keep up with the uncovered returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge funds that have outperformed the S&P 500 ETFs by more than 88 percentage points since March 2017. Between March 2017 and February 5, 2021, we selected monthly newsletter shares. 187.5%, compared to 75.8% for the SPY. Our stock market outperforms the market by more than 111 percentage points (see details here). We were also able to identify in advance a select group of hedge funds that outperformed the market significantly. We have been following the list of these stocks since February 2017 and share them by 13% until November 16th. Therefore, we believe that the hedge fund is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
Kanok Sulaiman / Shutterstock.com With this industry outlook in mind, we are launching a list of top 10 energy dividend stocks to invest in.
10. National Fuel Gas Company (NYSE: NFG)
Number of holders of hedge funds: 13 Dividend yield: 3.68%
National Fuel Gas Company offers various services in the energy sector, including exploration, production, pipeline and storage. In the most recent quarter, the company’s adjusted profit was $ 1.06, beating the street’s estimates by $ 0.02. The share has risen by about 25% over the past twelve months. The energy company paid dividends for 118 consecutive years and increased its annual dividend for 50 consecutive years.
According to our database, the number of long-term hedge fund positions of NFG decreased at the end of the fourth quarter of 2020. By the end of December, 13 hedge funds had a position in National Fuel Gas compared to the 16 funds in the third quarter. The company’s largest stakeholder is Mario Gabelli’s GAMCO Investors with 1.4 million shares worth $ 57.3 million.
9. MPLX LP (NYSE: MPLX)
Number of holders of hedge funds: 13 Dividend yield: 10.94%
MPLX is one of the top 10 energy dividend stocks to invest in. The company has a network of pipelines for crude oil and refined products, terminals for light products, gas processing plants and fractionation facilities. With around 10% dividend yield, MPLX is an attractive dividend stock in the energy sector. The company said in February that it plans to use excess cash to buy back shares because it believes its stock is undervalued.
At the end of the fourth quarter, 13 hedge funds in the 887 fund Insider Monkey database had an interest in MPLX LP, compared to 14 funds in the third quarter. Room Partners is the company’s largest stakeholder, with 2.8 million shares worth $ 60.2 million.
8. ONEOK, Inc. (NYSE: OKE)
Number of hedge fund holders: 22 Dividend yield: 7.85%
OneOK is a gas company in Tulsa, Oklahoma, which owns the major systems for natural gas fluids. In the fourth quarter, adjusted EBITDA increased by 12%, but missed Street’s forecasts. For FY 2021, the company expects a profit between $ 2.40 and $ 3.08, below the consensus of $ 3.
According to our database, 22 hedge funds have an OKE position at the end of the fourth quarter. The main stakeholder of the company is Two Sigma advisers, with 627,200 shares worth $ 24 million.
7. Magellan Midstream Partners, LP (NYSE: MMP)
Number of hedge fund holders: 22 Dividend yield: 9.24%
With a dividend yield of 9%, Magellan Midstream Partners is one of the best energy dividend stocks to invest in. The company owns ammonia and petroleum pipelines, more than 80 petroleum products terminals, refined and crude oil pipelines. The company’s Q4 results were better than expected, but the stock slipped with the 25% drop in distributable cash flow.
With a $ 72.9 million stake in Magellan Midstream Partners, 683 Capital Partners owns 1.7 million shares of the company by the end of the fourth quarter of 2020. Our database shows that 22 hedge funds had an interest in MMP at the end of the fourth quarter, compared to 20 funds at the end of the third quarter.
Phillips 66 (NYSE: PSX)
Number of hedge fund holders: 26 Dividend yield: 4.26%
Philips 66 is one of the top 10 energy dividend stocks to invest in. The company was founded after an effect of ConocoPhillips. In February, the company declared a dividend of $ 0.90 per share. Its forward yield is 4.83%. The company had a wider loss for the fourth quarter than expected due to weak demand and the COVID-19 impact.
There were 26 hedge funds in our database that had an interest in Phillips 66, compared to 27 funds in the third quarter. East Side Capital is the largest stakeholder in the company.
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Disclosure: None. Top 10 Energy Dividend Shares to Invest in is originally published on Insider Monkey.