These High-Dividend Energy Stocks Could Supercharge Your Passive Income Portfolio
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Investors love dividend stocks for one simple reason. Buying and holding a stock that generates passive income is the investor’s version of having your cake and eating it too. With that said, no dividend is ever guaranteed, so passive income investors need to build a diverse portfolio in multiple sectors. Analysts believe these stocks are worth considering if you’re looking for dividends in the energy sector.
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Chevron is one of the world’s bona fide petroleum giants and its impact on the petroleum, natural gas, and even geothermal energy sectors is hard to overstate. They have retail gas outlets in many U.S. states and drilling and refinery outposts all over the globe. Despite the potential threat posed by carbon emissions, much of the world’s automotive, aviation, and shipping industries are powered by Chevron products.
With the decidedly pro-fossil fuel Trump Administration set to take office in January, many energy sector analysts are betting that stocks like Chevron will continue to perform well. Chevron is coming off a strong Q3 2024, highlighted by $51 billion in revenue and earnings per share (EPS) of $2.51, which beat the consensus expectation of $2.47. This $161.50 stock is paying a 4% dividend, or about $1.60 per share. Conditions are ripe for an even bigger 2025.
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Texas-based ExxonMobil has been ubiquitous in the oil and gas sector for several decades. According to its most recent quarterly reports, ExxonMobil pumps over 4.5 million barrels daily. Its market cap exceeds $530 billion, making it the largest player in the sector. ExxonMobil is a member of the S&P 500 and has increased its dividend for 42 straight years, making it a confirmed dividend aristocrat.
2024 has been a big year for ExxonMobil, and its share price has been strong for several years. ExxonMobil’s share price has exploded from $68.13 in 2019 to its current price of $121.79. That represents a five-year increase of over 78%. As for the dividend, ExxonMobil is currently paying 3.27% or $3.98 per share.
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Although the petroleum and fossil fuel sectors look set for strong growth in 2025, overloading your portfolio with oil stocks could still be counterproductive. You may consider diversifying with dividend stocks from other energy sectors. Entergy is a Louisiana-based energy company that provides power for over three million residents in Texas, Mississippi, Arkansas, and Louisiana.
It’s also one of the largest nuclear energy providers in the country. Aside from Entergy’s sizable customer base, which provides it with ongoing revenue, Entergy’s nuclear power capabilities give it tremendous potential as a fuel source for AI. This has been a big factor in pushing Entergy’s share price up almost 50% in the last 12 months, and many believe there is still room for growth.
Benzinga’s analyst profile of Entergy stock shows that most of its 17 analysts give it a “buy” rating. BMO Capital, Mizuho, and Barclays set new price targets for Entergy on Nov. 18, with the average of the three targets coming in at $158.67. That’s about a 5% potential upside compared to the current share price of $151.06. Entergy also pays a 3.17% dividend, or $4.79 per share. Keep an eye on this stock.
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