The Organization of the Petroleum Exporting Countries (OPEC) announced Sunday that it will be staying with its announced production quotas and will keep them in place at least until the summer of 2023. The group of 13 countries had announced in November a reduction of these quotas by a combined 2 million barrels per day, which industry analysts have noted amounted to an effective production cut of 1 million barrels per day.
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When you combine that with the potential for a new Covid policy and a reopening of China, where enforced draconian lockdowns caused massive protests, you may have all the ingredients in place for a large price spike in crude oil. The black gold is down close to 40% from highs printed last summer, and some top industry leaders think that prices could be headed back to the $100 range.

Given that energy is the only sector that has shown any strength this year, and many of the top stocks have all backed up from their summertime highs, we screened our 24/7 Wall St. energy research database looking for the Buy-rated stocks that are best values with the biggest dividends. Six stocks hit our screen, but it is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.

Coterra Energy

This company was formed by the closing of the $17 billion merger of Cabot Oil & Gas and Cimarex Energy in 2021. Coterra Energy Inc. (NASDAQ: CTRA) is an independent oil and gas company engaged in the development, exploration and production of oil, natural gas and natural gas liquids (NGLs) in the United States. It primarily focuses on the Marcellus Shale, with approximately 177,000 net acres in the dry gas window of the play located in Susquehanna County, Pennsylvania.

The company also holds Permian Basin properties with approximately 306,000 net acres and Anadarko Basin properties located in Oklahoma with approximately 182,000 net acres. In addition, it operates natural gas and saltwater disposal gathering systems in Texas. The company sells its natural gas to industrial customers, local distribution companies, oil and gas marketers, major energy companies, pipeline companies and power generation facilities.

As of December 31, 2021, it had proved reserves of approximately 2,892,582 thousand barrels of oil equivalent, which include 189,429 thousand barrels of oil and other liquid hydrocarbons, 14,895 billion cubic feet of natural gas and 220,615 thousand barrels of natural gas liquids.

Shareholders receive a 9.13% dividend. Stifel has a $40 target price on Coterra Energy stock. The consensus target is $36.13, and shares closed on Monday at $26.20.

This red-hot energy play looks poised to press higher again. Diamondback Energy Inc. (NASDAQ: FANG) is an independent oil and natural gas company focused on the acquisition, development, exploration and exploitation of unconventional and onshore oil and natural gas reserves in the Permian Basin in West Texas and New Mexico.
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Diamondback Energy primarily focuses on the development of the Spraberry and Wolfcamp formations of the Midland basin, as well as the Wolfcamp and Bone Spring formations of the Delaware basin, which are part of the Permian Basin. As of December 31, 2021, the company’s total acreage position was approximately 524,700 gross acres in the Permian Basin, and estimated proved oil and natural gas reserves were 1,788,991 thousand barrels of crude oil equivalent.

The company also holds working interests in 5,289 gross producing wells, as well as royalty interests in 6,455 additional wells. In addition, the company owns mineral interests in approximately 930,871 gross acres and 27,027 net royalty acres in the Permian Basin and Eagle Ford Shale, and it owns, operates, develops and acquires midstream infrastructure assets, including 866 miles of crude oil gathering pipelines, natural gas gathering pipelines, and an integrated water system in the Midland and Delaware Basins of the Permian Basin.

Investors receive a 6.16% dividend. Piper Sandler’s $209 target price is well above the $183.70 consensus target. Diamondback Energy stock closed at $142.00 on Monday.

Enbridge

This off-the-radar idea based in Canada looks poised to break out to new highs soon. Enbridge Inc. (NYSE: ENB) is an energy infrastructure company that operates through the following five segments.

• The Liquids Pipelines segment operates pipelines and related terminals to transport various grades of crude oil and other liquid hydrocarbons in Canada and the United States.
• The Gas Transmission and Midstream segment invests in natural gas pipelines and gathering and processing facilities in Canada and the United States.
• The Gas Distribution and Storage segment is involved in natural gas utility operations serving residential, commercial and industrial customers in Ontario, as well as natural gas distribution and energy transportation activities in Quebec.
• The Renewable Power Generation segment operates power-generating assets, such as wind, solar, geothermal and waste heat recovery facilities, and transmission assets in North America and Europe.
• 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.

Enbridge stock comes with a 6.43% dividend. In U.S. dollars, the Royal Bank of Canada price target is $48.09. The consensus target is $44.20, and Monday’s close was at $39.92.

The top master limited partnership is a very safe way for investors looking for energy exposure and income. Energy Transfer L.P. (NYSE: ET) owns and operates one of the largest and most diversified portfolios of energy assets in the United States, with a strategic footprint in all the major domestic production basins.
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This publicly traded limited partnership has core operations that include complimentary natural gas midstream, intrastate and interstate transportation and storage assets; crude oil, natural gas liquids (NGLs) and refined product transportation and terminaling assets; NGL fractionation; and various acquisition and marketing assets.

After the purchase of Enable Partners last December, Energy Transfer now owns and operates more than 114,000 miles of pipelines and related assets in all the major U.S. producing regions and markets across 41 states, further solidifying its leadership position in the midstream sector.

The completion of the transaction was immediately accretive to Energy Transfer and furthers Energy Transfer’s deleveraging efforts. It also adds significant fee-based cash flows from fixed-fee contracts. Additionally, the combined operations of the two companies are expected to generate annual run-rate cost and efficiency synergies of more than $100 million, excluding potential financial and commercial synergies.

Through its ownership of Energy Transfer Operating, formerly known as Energy Transfer Partners, the company also owns Lake Charles LNG, as well as the general partner interests, the incentive distribution rights and 28.5 million common units of Sunoco, as well as the general partner interests and 39.7 million common units of USA Compression Partners.

Investors receive an 8.54% distribution. Energy Transfer stock has a $17 price target at Morgan Stanley. The consensus target is $16.25, and shares were last seen on Monday trading at $12.18.

Pioneer Natural Resources

Many Wall Street analysts love this stock as a pure crude oil play, and the company also employs a variable dividend strategy. Pioneer Natural Resources Co. (NYSE: PXD) operates as an independent oil and gas exploration and production company in the United States.

The company explores for, develops and produces oil, natural gas liquids (NGLs) and natural gas. It has operations in the Midland Basin in West Texas. As of December 31, 2021, the company had proved undeveloped reserves and proved developed non-producing reserves of 130 million barrels of oil, 92 million barrels of NGLs and 462 billion cubic feet of gas, and it owned interests in 11 gas processing plants.
Pioneer production services are supported by 100 well-servicing rigs, more than 100 cased-hole, open-hole and offshore wireline units, and a range of advanced coiled tubing units.
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Pioneer is a huge player in the Permian basin and the Eagle Ford in Texas, and the company owns more than 20,000 locations in the world’s second-largest oil reservoir in the Midland Basin. With a stellar balance sheet, the company is poised to remain a top player in the Permian, as it expects to deliver solid production growth going forward.

The dividend yield here is 10.63%, though it varies from quarter to quarter. Barclays has set a $309 target price, while the consensus target for Pioneer Natural Resources stock is $284.97. The closing share price on Monday was $230.37.

TotalEnergies

This French integrated giant is a 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 Integrated Gas, Renewables & Power segment engages in the liquefied natural gas (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.

Holders of TotalEnergies stock receive a 4.66% dividend. The $92 BofA Securities price target compares with a $71.71 consensus target and the most recent close at $59.77.

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These are six of the highest-paying energy stocks from all around the world. They offer investors the best of both worlds, with growth potential and dependable dividends. With earnings reporting over, and the potential for a Santa Claus rally to end 2022, it makes sense, at a minimum, to add partial positions now.

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