Oil Will Stay Higher Regardless of Iran Outcome: 5 High-Yield Dividend Energy Buys

Many on Wall Street are arguing that oil prices could remain elevated regardless of how the Iran conflict resolves, for several structural reasons. Global spare capacity is largely concentrated in a handful of OPEC+ nations. It has grown increasingly thin, meaning any disruption to supply chains, shipping lanes, or refining infrastructure takes longer to be absorbed and worked through the system. The Strait of Hormuz remains a critical path for roughly 20% of the global oil trade, and even a ceasefire or de-escalation wouldn’t instantly restore insurer confidence or normalize tanker routing, keeping freight and risk premiums largely baked into prices.

Meanwhile, years of underinvestment in upstream exploration and production mean the supply side can’t respond quickly to demand signals the way it once could. Add to that a weaker dollar environment, persistent demand from emerging markets, particularly India and China, and OPEC+’s demonstrated willingness to defend price floors through coordinated cuts, and the conditions for structurally higher oil exist well beyond the current hostilities in the Middle East. The bottom line for investors is that if you are underweight or don’t own any energy names, now’s the time to consider adding some to your portfolio.

We decided to screen our 24/7 Wall St. energy stock database, looking for companies that still deliver large and dependable dividends while remaining good investments on a valuation basis. While we remain very positive on the mega-cap integrated giants, they have had spectacular runs and would be much better purchases after a solid price pullback.

Five companies that pay significant dividends and offer shareholders some of the best valuations currently are at the top of our strong buy list for investors. All still offer reasonable entry points, with outstanding upside potential to the posted Wall Street target prices. All five are also rated Buy at the top Wall Street firms we cover at 24/7 Wall St.

Why do we cover the high-yielding energy dividend stocks?

Since 1926, dividends have accounted for approximately 32% of the S&P 500’s total return, while capital appreciation has accounted for 68%. Therefore, sustainable dividend income and the potential for capital appreciation are essential to total return expectations. A study by Hartford Funds, in collaboration with Ned Davis Research, found that dividend stocks delivered an annualized return of 9.18% over the past 50 years (1973 to 2023). Over the same timeline, this was more than double the annualized return for non-payers (3.95%).

Chord Energy

This very off-the-radar idea still offers investors an outstanding entry point for the shares and a strong 3.92% dividend. Chord Energy (NASDAQ: CHRD) is an independent exploration and production company engaged in the acquisition, exploration, development, and production of crude oil, natural gas liquids (NGL), and natural gas primarily in the Williston Basin.

The company’s operations are focused on the North Dakota and Montana areas of the Williston Basin, targeting the Middle Bakken and Three Forks formations, which are present across a substantial portion of its acreage.

Chord Energy has an average daily production of approximately 232,737 net barrels of oil equivalent. The company has approximately 9,011 (4,174.2 net) total gross productive wells, of which it operated 4,824 gross (3,752.2 net) productive wells. It sells its crude oil, NGL, and natural gas production to refiners, marketers, and other purchasers that have access to nearby pipeline and rail facilities.

Wells Fargo has an Overweight rating with a huge $175 target price.

Diamondback Energy

This is one of the best pure-play Permian Basin exploration and production companies, paying a solid 2.07% dividend. Diamondback Energy (NASDAQ: FANG) is an independent oil and natural gas company focused on the acquisition, development, exploration, and exploitation of unconventional onshore oil and natural gas reserves primarily in the Permian Basin of West Texas.

The Goldman Sachs team recently said this regarding the company:

We continue to see FANG trading at an attractive 12% average FCF yield on 2027/2028 estimates versus a large-cap oily E&P peer average of 10% (peers include OXY, EOG, DVN). FANG is well-positioned to capture upside during periods of strong commodity prices, given its low cost structure and lower capital intensity than peers. In addition, FANG has continued to reiterate the flexibility embedded within the company’s Permian operations and continued progress in further taking costs out of the business.

The company’s activities are primarily focused on the horizontal development of the Wolfcamp and Spraberry formations in the Midland Basin, and the Wolfcamp and Bone Spring formations in the Delaware Basin, within the Permian Basin.

Its subsidiary, Viper Energy, is focused on owning and acquiring mineral and royalty interests in oil and natural gas properties, primarily in the Permian Basin, and derives royalty and lease-bonus income from such interests.

Diamondback Energy has approximately 859,203 net acres, which primarily consists of 742,522 net acres in the Midland Basin and 116,681 net acres in the Delaware Basin. The company’s subsidiaries include:

• Diamondback E&P
• Rattler Midstream GP
• Rattler Midstream
• QEP Resources

UBS has a Buy rating with a target price of $245.

Enbridge

Enbridge (NYSE: ENB | ENB Price Prediction) owns and operates pipelines throughout Canada and the United States. This is an off-the-radar idea based in Canada, poised to break out to new highs soon, and it pays a rich 6.92% dividend. Enbridge operates as an energy infrastructure company. It announced its 31st consecutive annual dividend increase in 2026, lifting the payout by another 3%. With roughly 98% of its annual earnings backed by long-term, fixed-rate contracts and regulated rate structures, the company stands out as one of the most defensive and reliable plays in the energy infrastructure sector.

The company operates through five segments. The Liquids Pipelines segment operates pipelines and related terminals in Canada and the United States to transport various grades of crude oil and other liquid hydrocarbons. The Gas Transmission and Midstream segment invests in natural gas pipelines and gathering and processing facilities in Canada and the United States.

Enbridge’s Gas Distribution and Storage segment is involved in natural gas utility operations, serving residential, commercial, and industrial customers in Ontario, as well as in natural gas distribution and energy transportation activities in Quebec. The Renewable Power Generation segment operates power-generating assets, including wind, solar, geothermal, and waste heat recovery facilities, as well as transmission assets, in North America and Europe.

And the Energy Services segment provides energy marketing services to refiners, producers, and other customers, as well as physical commodity marketing and logistical services in Canada and the United States.

Royal Bank of Canada has an Outperform rating and a $76 target price.

Energy Transfer

Energy Transfer (NYSE: ET) is one of North America’s largest and most diversified midstream energy companies, with a strategic footprint across all major domestic production basins. This top master limited partnership is a safe option for investors seeking energy exposure and income, as the company pays a 6.94% distribution yield.

The company is a publicly traded limited partnership with core operations that include:

• Complementary natural gas midstream, intrastate, and interstate transportation and storage assets
• Crude oil, natural gas liquids (NGL), and refined product transportation and terminalling assets
• NGL fractionation
• Various acquisition and marketing assets

Following the acquisition of Enable Partners in December 2021, Energy Transfer owns and operates over 114,000 miles of pipelines and related assets in 41 states, spanning all major U.S. producing regions and markets. This further solidifies its leadership position in the midstream sector.

Through its ownership of Energy Transfer Operating, formerly known as Energy Transfer Partners, the company also owns Lake Charles LNG; the general partner interests, the incentive distribution rights, and 28.5 million standard units of Sunoco (NYSE: SUN); and the public partner interests and 39.7 million standard units of USA Compression Partners (NYSE: USAC).

Wells Fargo has an Overweight rating on the shares, with a $25 target price.

Viper Energy

Viper Energy (NASDAQ: VNOM) owns and acquires mineral and royalty interests in oil and natural gas properties in the Permian Basin. With a 4.91% dividend yield, this mid-cap energy play offers significant upside relative to the Goldman Sachs target price. Viper Energy is an independent oil and natural gas company focused on the acquisition, development, exploration, and exploitation of unconventional, onshore oil and natural gas reserves, primarily in the Permian Basin in West Texas.

The Goldman Sachs analysts noted this in a recent report:

FANG is well-positioned to capture upside during periods of strong commodity prices, given its low cost structure and lower capital intensity than peers. In addition, FANG has continued to reiterate the flexibility embedded within the company’s Permian operations and continued progress in further taking costs out of the business.

The company primarily focuses on oil and natural gas properties in the Permian Basin, which covers approximately 75,000 square miles centered on Midland, Texas. The Viper Energy assets consist of mineral and royalty interests underlying 1,197,638 gross and 34,217 net royalty acres, primarily in the Permian Basin. It is estimated that proved oil and natural gas reserves totaled 179,249 thousand barrels of crude oil equivalent (MBOE). The company’s proven undeveloped reserves include approximately 529 gross horizontal well locations. Its proved reserves include approximately 50% oil, 25% natural gas liquids, and 25% natural gas.

Goldman Sachs has a Buy rating, and its $72 price target represents a stunning 59% gain from current levels.