2 High-Yielding Energy Stocks Investors Should Consider
Energy is an essential sector. We all need energy to drive our cars, power our homes and businesses, and to operate the devices that make life easier and more enjoyable. Nevertheless, some of the companies that supply the world’s energy are extremely undervalued and under-appreciated by investors. This means that there are opportunities for investors looking for value. There are also opportunities out there for investors looking for dividends, as energy companies are among the most shareholder-friendly. Many pipeline companies, integrated oil companies, and utility companies pay very nice dividends compared to the historically 1.9 percent offered by the S&P 500.
With this being the case, I think investors should consider taking positions in the companies I discuss here. They provide an essential product to society, they are profitable, and they are inexpensive. This makes for a solid and simple investment thesis.
1. Conoco Phillips (NYSE:COP)
ConocoPhillips is America’s third-largest integrated oil company, behind Chevron (NYSE:CVX) and Exxon Mobil (NYSE:XOM). While Exxon Mobil returns more capital to shareholders thanks to its sizable share repurchase program, investors looking for income today should look to ConocoPhillips. This company pays a 3.7 percent dividend, about double that of the S&P 500. It also trades at about 11 times earnings. Despite these attractive metrics, it has outperformed its integrated oil peers ever since it spun off its refining business in order to focus solely on exploration and production.
The company’s earnings are expected to grow as the company grows production. It has massive exploration programs in the Texas Eagleford Shale region and off the coast of West Africa, which gives it long-term growth potential.