The price of West Texas Intermediate crude is approaching $90 per barrel. The Organization of the Petroleum Exporting Countries’ prediction of robust global demand growth amid tight supplies is primarily aiding the crude price rally.
The favorable crude price is making the exploration and production business extremely profitable. Higher upstream activities will increase demand for oilfield services since the players will guide explorers and producers in efficiently setting up oil and gas wells.
Increased drilling activities will boost demand for midstream assets as more volumes of the commodities will get transported and stored. Also, the shortage in global distillate fuel oil inventories is putting upward pressure on fuel prices, thereby aiding refiners.
Given the backdrop, it is the ideal time for investors to allocate money to prospective energy stocks offering attractive dividend yields. We are employing our proprietary Stock Screener to zero in on three such names that are well-poised to gain. One of the stocks carries a Zacks Rank #2 (Buy), while the other two sport a Zacks Rank #1 (Strong Buy). All the stocks offer juicy dividend yields that are higher than the energy sector’s 3.4% yield.
3 Stocks in the Spotlight
Magellan Midstream Partners LP MMP has extensive petroleum midstream infrastructures that will be needed in the United States for decades to come. The business model of the Zacks #2 Ranked partnership is resilient to commodity price fluctuations and derives stable fee-based revenues.
The cash distribution yield picture looks bright, with Magellan Midstream’s current yield being 6.1%. The metric has consistently been higher than the sector over the past year. (Check Magellan Midstream’s distribution history here).
More patented equipment and systems of Solaris Oilfield Infrastructure Inc SOI will likely be deployed to the prolific oil and gas basins in the United States. This is because favorable commodity prices will likely improve upstream activities, increasing demand for those equipment and systems. Currently, Solaris sports a Zacks Rank of 1 and offers a dividend yield of 4.1%. (Check Solaris Oilfield’s distribution history here).
Having direct access to prolific crude oil fields in the Anadarko and Arkoma Basins, leading petroleum refiner CVR Energy Inc CVI is well-poised to grow. #1 Ranked CVI is leveraging its strong refining fundamentals, driving its cashflows and earnings momentum. Currently, the stock offers a dividend yield of 5.8%. Its dividends have mostly been higher than the sector over the past year. (Check CVR Energy’s dividend history here).
Magellan Midstream Partners, L.P. (MMP): Free Stock Analysis Report
CVR Energy Inc. (CVI): Free Stock Analysis Report
Solaris Oilfield Infrastructure, Inc. (SOI): Free Stock Analysis Report
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