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- After languishing for much of the summer, oil prices look to head higher.
- Ultra-yield energy dividend stocks look cheap in what is a very expensive stock market.
- Grab this outstanding free report today: Access 2 legendary, high-yield dividend stocks Wall Street loves.
While most investors over the past year have been fixated on the ongoing parabolic rise of the Nasdaq, the S&P 500, and Bitcoin, hardly any big money has been watching energy. With the crisis in the Middle East expanding and the potential for a big retaliatory strike from Iran and its proxies like Hezbollah, the price of oil could be sitting on a powder keg, ready to explode higher.
Top energy strategists have been pointing to the potential for extreme volatility to return to the energy sector should Iran launch an attack against Israel after they killed a top Hezbollah leader in Lebanon and a Hamas leader in Tehran recently. The Middle East produces about 26% of the world’s oil and has five of the top 10 oil-producing countries.
In addition, Iran, Iraq, Saudi Arabia, Kuwait, Oman, the United Arab Emirates, Yemen, Qatar, and Syria own 48% of the world’s crude oil reserves and 38% of its natural gas. Any widespread production disruptions resulting from expanding the current hostilities could result in skyrocketing oil prices.
We screened our 24/7 Wall Street energy stock research database and found four top companies, three of which are energy master limited partnerships, that are all Strong Buy rated by top Wall Street analysts and pay big, dependable, ultra-yield dividends. Speaking of dividends, this free report can be yours today.
Civitas Resources
Civitas Resources, Colorado’s first carbon-neutral energy producer, is leading Colorado’s oil and gas industry in its commitment to sustainable operations.
Trading at a ridiculous 4.72 times estimated 2025 earnings with a huge 10.06% dividend, this company could be a total return gem for the rest of 2024. Civitas Resources Inc. (NYSE: CIVI | CIVI Price Prediction) is an exploration and production company focused on the acquisition, development, and production of oil and natural gas in the Rocky Mountain region, primarily in the Wattenberg Field of the Denver-Julesburg Basin of Colorado.
Last October, Civitas signed an agreement with Vencer Energy to acquire oil-producing assets in the Midland Basin of west Texas for a total consideration of approximately $2.1 billion, subject to customary terms, conditions, and closing price adjustments. The acquisition is expected to close this month.
When the company posted very solid second-quarter results, Civitas reported that Permian Basin sales volumes increased nearly 12% from the first quarter, driven by strong production from recent Delaware and Midland Basin wells. In addition, the total cash operating expense per barrel of oil equivalent or BOE was $8.97, below expectation and the first quarter of 2024.
Energy Transfer
Energy Transfer is one of North America’s largest and most diversified midstream energy companies.
This top master limited partnership is a safe way for investors looking for energy exposure and income, as the company pays a large 8.17% distribution. Energy Transfer L.P. (NYSE: ET) owns and operates one of the largest and most diversified portfolios of energy assets in the United States. It has a strategic footprint in all of the major domestic production basins.
The company has 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 and various acquisition and marketing assets
Energy Transfer owns and operates more than 114,000 miles of pipelines and related assets in all significant U.S.-producing regions and markets across 41 states, further solidifying its leadership position in the midstream sector.
Through its ownership of Energy Transfer Operating, the company also owns Lake Charles LNG Company, as well as the general partner interests, the incentive distribution rights, and 28.5 million standard units of Sunoco L.P. (NYSE: SUN), and the public partner interests and 39.7 million standard units of USA Compression Partners L.P. (NYSE: USAC).
Mach Natural Resources
Mach Natural Resources is an independent upstream oil and gas company that acquires, develops, and produces oil, natural gas, and NGL.
This 2023 IPO is trading below the initial offering price and pays a gigantic 15.93% dividend. Mach Natural Resources L.P. (NYSE: MNR) is an independent upstream oil and gas company. It focuses on the acquisition, development, and production of oil, natural gas, and natural gas liquids reserves in the Anadarko Basin region of Western Oklahoma, southern Kansas, and the Texas panhandle.
The analysts at Raymond James noted that Mach is led by Tom Ward, Co-Founder of Chesapeake Energy. Mach is another entrant into the E&P MLP space. It is a pure-play operator in the Anadarko Basin. It is leveraging its strong position (1 million net acres) to become the primary consolidator in the region.
Mach’s midstream position and lower base decline (~20%) allow the company to target a lower reinvestment rate (~30%) relative to the overall industry. In addition, it is one of the only companies organized as a limited partnership that is an oil and gas producer.
USA Compression Partners
USA Compression Partners provides natural gas compression services under term customer contracts.
While perhaps less known than their peers, this top company pays shareholders a hefty 9.56% dividend. USA Compression Partners L.P. (NYSE: USAC) provides natural gas compression services.
The company offers compression services to:
- Oil companies and independent producers
- Processors
- Gatherers
- Transporters of natural gas and crude oil, as well as operating stations
USA Compression Partners primarily provides natural gas compression services to infrastructure applications. These include centralized natural gas gathering systems, processing facilities, and gas lift applications for crude oil wells.
Those looking to avoid the pesky K-1s that come with owning energy MLPs can always purchase shares in the ALPS Alerian MLP exchange-traded fund (NYSEArca: AMLP). This fund pays a hefty 7.34% dividend, and investors receive a 1099 instead of a K-1.
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