After a dreadful November sell-off, West Texas Intermediate crude oil has roared back past $80 a barrel and looks to be headed higher fast as OPEC has given every indication that it will be holding current production levels to protect the $75 level and higher price points. While all of the shut-in Gulf of Mexico production has returned to 100% since hurricane Ida, Permian Basin producers have continued to watch their production levels, as free cash flow, dividends and stock buybacks to placate shareholders are now the name of the game over production growth.
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Many top oil strategists across Wall Street are warning that severe shortages of oil and natural gas could be headed our way this year and beyond. Goldman Sachs noted recently that oil could hit $100 a barrel, as demand might reach a new record high in the next two years. The Goldman Sachs analysts predict a new high in oil demand in 2022 and again in 2023. Both international benchmark Brent crude and U.S. crude prices spiked above $80 before the November sell-off, as demand continued to outstrip supply, and both have broken back through that level.

We screened our 24/7 Wall St. database looking for the best dividend-paying energy stocks rated Buy at major Wall Street firms. These four are cheap and have some serious upside potential. It is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.

BP

This is one of the premier European integrated oil giants, and Goldman Sachs is very positive on the shares. BP PLC (NYSE: BP) engages in the energy business worldwide. It produces and trades in natural gas; offers biofuels; operates onshore and offshore wind power and solar power generating facilities; and provides de-carbonization solutions and services, such as hydrogen and carbon capture, usage and storage.

The company is also involved in the convenience and mobility business, which manages the sale of fuels to wholesale and retail customers, convenience products, aviation fuels, and Castrol lubricants. It is involved in refining, supply and trading of oil products, as well as operation of electric vehicle charging facilities. In addition, it produces and refines oil and gas, and it invests in upstream, downstream and alternative energy companies, as well as in advanced mobility, bio and low carbon products, carbon management, digital transformation and power and storage areas.

Shareholders receive a 4.69% yield. The Goldman Sachs price target for the domestic shares is $45, while the consensus target is $34.17. BP stock rose over 2% on Wednesday to close at $31.19.

Shares of this mega-cap energy leader backed up nicely as oil sold off in November, and they still offer investors an excellent entry point. Exxon Mobil Corp. (NYSE: XOM) is the world’s largest international integrated oil and gas company. It explores for and produces crude oil and natural gas in the United States, Canada, South America, Europe, Africa and elsewhere.
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Exxon also manufactures and markets commodity petrochemicals, including olefins, aromatics, polyethylene and polypropylene plastics, and specialty products, and it transports and sells crude oil, natural gas and petroleum products.

The company announced last month that ExxonMobil Catalysts and licensing has introduced ExxonMobil Renewable Diesel (EMRD) process technology to help meet the evolving needs for mobility, while utilizing renewable feedstock. This new process technology converts feedstocks including, but not limited to, vegetable oils, unconverted cooking oil and animal fats, into renewable diesel. Due to significant interest in producing renewable jet fuel as a primary product, Exxon is also developing advanced catalyst and process technology solutions that will offer EMRD process licensees flexibility to tailor the amount of jet fuel versus diesel produced.

Exxon Mobil stock comes with a 5.14% dividend. The BofA Securities price target of $100 is well above the $68.40 consensus target. Shares closed at $71.14 on Wednesday.

TotalEnergies

This French integrated giant is another great way to play an energy rally from the European side. TotalEnergies S.E. (NYSE: TTE) operates as an integrated oil and gas company worldwide. Its Exploration & Production segment engages in oil and natural gas exploration and production activities in approximately 50 countries.

The company’s Integrated Gas, Renewables & Power segment engages in the LNG production, shipping, trading and regasification activities; trading of liquefied petroleum gas (LPG), petcoke and sulfur, natural gas and electricity; transportation of natural gas; electricity production from natural gas, wind, solar, hydroelectric and biogas sources; energy storage activities; and development and operation of biomethane production units, as well as provides energy efficiency services.

The Refining & Chemicals segment refines petrochemicals, including olefins and aromatics; and polymer derivatives, such as polyethylene, polypropylene, polystyrene and hydrocarbon resins, as well as biomass conversion and elastomer processing. This segment also engages in trading and shipping crude oil and petroleum products.
The Marketing & Services segment produces and sells lubricants; supplies and markets petroleum products, including bulk fuel, aviation and marine fuel, special fluids, compressed natural gas, LPG and bitumen; and provides fuel payment solutions. It operates approximately 15,500 service stations.

Investors receive a 4.51% dividend. BofA Securities has set a $71 price target on TotalEnergies stock. The consensus target is $59.38, and shares closed trading on Wednesday at $54.97.
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Williams Companies

This top energy company is also a solid pick for more conservative investors looking for exposure to LNG. Williams Companies Inc. (NYSE: WMB) operates as an energy infrastructure company primarily in the United States.

Its Transmission & Gulf of Mexico segment comprises Transco and Northwest natural gas pipelines, as well as natural gas gathering and processing, and crude oil production handling and transportation assets in the Gulf Coast region. The Northeast G&P segment engages in the midstream gathering, processing and fractionation activities in the Marcellus Shale region, primarily in Pennsylvania and New York, and the Utica Shale region of eastern Ohio.

The West segment comprises gas gathering, processing and treating operations in the Rocky Mountain region of Colorado and Wyoming, the Barnett Shale region of north-central Texas, the Eagle Ford Shale region of South Texas, the Haynesville Shale region of northwest Louisiana and the Mid-Continent region, which includes the Anadarko, Arkom, and Permian basins. It also includes NGL and natural gas marketing operations, as well as storage facilities.

The company owns and operates 30,000 miles of pipelines, 34 processing facilities, nine fractionation facilities and approximately 23 million barrels of NGL storage capacity.

Shareholders receive a 5.68% dividend. The $34 Wells Fargo price compares with the $28.19 consensus target for Williams Companies stock, as well as Wednesday’s close at $29.20 a share.

One caveat for investors considering the two European ideas is that many foreign governments automatically withhold taxes on dividends paid by companies incorporated within their borders. This means that a certain percentage of your dividend may be withheld by your broker. With that noted, oil looks to be going higher, and this may be the last good chance to add these dependable dividend leaders at reasonable levels.

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