3 High Yield Energy Stocks That Are Screaming Buys Now
Sunday, Nov 17, 2024 4:02 am ET
4min read Energy stocks have long been a favorite among income-oriented investors, and with good reason. They often offer attractive dividend yields and the potential for significant capital appreciation. In this article, we'll take a closer look at three energy stocks that are currently screaming buys, thanks to their high dividend yields and strong growth prospects.
First up, we have the Global X MLP ETF (MLPA). This ETF invests in master limited partnerships (MLPs) in midstream pipelines and storage, offering an 8.3% dividend yield and an expense ratio of 0.45%. The ETF's diversified portfolio, with Energy Transfer, Enterprise Product Partners, and MPLX representing more than 10% of assets each, provides a relatively stress-free way to gain exposure to the midstream energy sector.
Next, we have Devon Energy (DVN). This oil and gas exploration and production company is expected to generate significant free cash flow in 2025, with a forecasted FCF yield of 9%. Devon is using its cash flow to reduce debt and make share buybacks, positioning it for future dividend increases. The company's dividend payout ratio of 28% is lower than its peers, indicating strong financial health and dividend sustainability.
Lastly, we have Diamondback Energy (FANG). Another oil and gas exploration and production company, Diamondback is expected to generate $3.4 billion in FCF at current commodity prices. The company has a post-dividend breakeven oil price of $37 per barrel and a dividend payout ratio of 47%, which is manageable given its robust cash flow generation. Diamondback's dividend yield is currently 2%, but with its strong growth prospects, this could increase significantly in the coming years.
So, why are these energy stocks screaming buys now? Well, for starters, they offer attractive dividend yields that are competitive with their peers and historical averages. Additionally, their strong cash flow generation and robust balance sheets suggest that their dividends are sustainable in the long term. Furthermore, these companies' energy transition strategies, combined with their strong financial performance, make them compelling long-term investments.
In conclusion, if you're looking for high-yield energy stocks that are screaming buys now, consider adding the Global X MLP ETF, Devon Energy, and Diamondback Energy to your portfolio. These companies offer attractive dividend yields, strong growth prospects, and a solid foundation for long-term investment success. Just remember to do your own research and consult with a financial advisor before making any investment decisions. Happy investing!
First up, we have the Global X MLP ETF (MLPA). This ETF invests in master limited partnerships (MLPs) in midstream pipelines and storage, offering an 8.3% dividend yield and an expense ratio of 0.45%. The ETF's diversified portfolio, with Energy Transfer, Enterprise Product Partners, and MPLX representing more than 10% of assets each, provides a relatively stress-free way to gain exposure to the midstream energy sector.
Next, we have Devon Energy (DVN). This oil and gas exploration and production company is expected to generate significant free cash flow in 2025, with a forecasted FCF yield of 9%. Devon is using its cash flow to reduce debt and make share buybacks, positioning it for future dividend increases. The company's dividend payout ratio of 28% is lower than its peers, indicating strong financial health and dividend sustainability.
Lastly, we have Diamondback Energy (FANG). Another oil and gas exploration and production company, Diamondback is expected to generate $3.4 billion in FCF at current commodity prices. The company has a post-dividend breakeven oil price of $37 per barrel and a dividend payout ratio of 47%, which is manageable given its robust cash flow generation. Diamondback's dividend yield is currently 2%, but with its strong growth prospects, this could increase significantly in the coming years.
So, why are these energy stocks screaming buys now? Well, for starters, they offer attractive dividend yields that are competitive with their peers and historical averages. Additionally, their strong cash flow generation and robust balance sheets suggest that their dividends are sustainable in the long term. Furthermore, these companies' energy transition strategies, combined with their strong financial performance, make them compelling long-term investments.
In conclusion, if you're looking for high-yield energy stocks that are screaming buys now, consider adding the Global X MLP ETF, Devon Energy, and Diamondback Energy to your portfolio. These companies offer attractive dividend yields, strong growth prospects, and a solid foundation for long-term investment success. Just remember to do your own research and consult with a financial advisor before making any investment decisions. Happy investing!
Disclaimer: the above is a summary showing certain market information. AInvest is not responsible for any data errors, omissions or other information that may be displayed incorrectly as the data is derived from a third party source. Communications displaying market prices, data and other information available in this post are meant for informational purposes only and are not intended as an offer or solicitation for the purchase or sale of any security. Please do your own research when investing. All investments involve risk and the past performance of a security, or financial product does not guarantee future results or returns. Keep in mind that while diversification may help spread risk, it does not assure a profit, or protect against loss in a down market.