24/7 Wall St. Insights

• After a solid start to 2024, the energy sector is up less than 4%.
• Energy stocks pay some of Wall Street’s most dependable dividends.
• Sit back and let dividends do the heavy lifting for a simple, steady path to serious wealth creation over time. Grab a free copy of “7 Things I Demand in a Dividend Stock,” plus get our two best dividend stocks to own today. Access 2 legendary, high-yield dividend stocks Wall Street loves.

Investors love dividend stocks because they provide dependable income, passive income streams, and an excellent opportunity for solid total return. Total return includes interest, capital gains, dividends, and distributions realized over time. In other words, the total return on an investment or portfolio consists of income and stock appreciation.

With the third quarter closing soon, investors looking to shift their portfolios for the final quarter of another stellar year for equity investors may want to look at energy, as the sector has struggled in 2024. This time, a year ago, West Texas Intermediate was trading in the $90 range. However, since a peak of $83.57 in late April, the price for the benchmark giant has traded flat for the last five months, closing recently at $67.22.

The wildcard for the black gold is the Middle East. With tensions ripping higher as the Israeli Army turns its attention to Hezbollah in Lebanon, the fears for a widening conflict in an area that is always a tinderbox are growing. Hamas has taken a beating in Gaza since the massacre on October 7, 2023. However, Hezbollah operates farther away. It recently launched dozens of missiles at an Israeli military base after strikes against the terrorist group by Israel, and a rocket was fired at Tel Aviv.

For investors, the timing could be perfect for grabbing some of the high-yield dividend giants that have treaded water this year while AI-related tech stocks have soared higher. We screened our 24/7 Wall St. energy research database and found five companies offering big, dependable dividends and the potential for serious upside. All are rated Buy at top Wall Street firms.

Why do we cover ultra-high-yield stocks?

While only suited for some, those trying to build solid passive income streams can do exceptionally well with some of these top companies in their portfolios. Paired with more conservative blue-chip dividend giants, investors can use a barbell approach to get passive income streams that make a significant difference.

Berry

While off the radar, Berry Corp. (NYSE: BRY) could be a huge winner. It trades at just six times the estimated 2025 earnings and posts a stunning 14.15% dividend. Berry is an independent upstream energy company that develops and produces conventional oil reserves in the western United States.

It operates through these segments:

• Exploration and Production (E&P)
• Well Servicing and Abandonment (CJWS)

The E&P segment develops and produces onshore, low-geologic-risk, and long-lived conventional oil and gas reserves, primarily in California and Utah.

CJWS unit provides well site services in California to oil and natural gas production companies, focusing on:

• Well Servicing
• Well abandonment
• Water logistics

It also offers:

• Rig-based and coiled tubing-based healthy maintenance and workover services
• Recompletion services
• Fluid management services
• Fishing and rental services
• Ancillary oilfield services

Civitas Resources

Trading at a dirt cheap 5.45 times estimated 2025 earnings with a massive 11.17% dividend, this company could be a total return gem for 2024 and 2025. Civitas Resources Inc. (NYSE: CIVI) is an exploration and production company. It is 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 stock and cash deal closed in January.

CVR Energy

This Ichan Enterprises subsidiary is a perfect idea now, with oil way off the 52-week highs and paying shareholders a strong 8.54% dividend. CVR Energy Inc. (NYSE: CVR) engages in petroleum refining, marketing, and nitrogen fertilizer manufacturing activities in the United States with its subsidiaries.

It operates in two segments:

• Petroleum
• Nitrogen Fertilizer

The Petroleum segment refines and supplies gasoline, crude oil, distillate, diesel fuel, and other refined products. It also owns and operates a coking medium-sour crude oil refinery in southeast Kansas and a crude oil refinery in Wynnewood, Oklahoma, as well as supporting logistics assets. This segment primarily serves retailers, railroads, farm cooperatives, and other refiners/marketers.

The Nitrogen Fertilizer segment owns and operates a nitrogen fertilizer plant in North America that utilizes a pet coke gasification process to produce nitrogen fertilizer products and a nitrogen fertilizer facility in East Dubuque, Illinois, that produces nitrogen fertilizers in the form of ammonia and urea ammonium nitrate (UAN), nitric acid, and liquid and granulated urea.

This segment primarily markets UAN products to agricultural customers and ammonia products to agricultural and industrial customers.

Mach Natural Resources

This 2023 IPO is trading below the initial offering price. Mach Natural Resources L.P. (NYSE: MNR) recently conducted a secondary offering to purchase more producing assets and will pay an estimated 13% dividend.

Mach Natural Resources is an independent upstream oil and gas company. It is focused on acquiring, developing, and producing 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 note 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, 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 exploration and production companies organized as a limited partnership as it is an oil and gas producer.

TXO Partners

With a massive 12.49% dividend and trading not far from a 52-week low, this company is a bargain at current levels. TXO Partners L.P. (NYSE: TXO) is an oil and natural gas company focusing on acquiring, developing, optimizing, and exploiting conventional oil, natural gas, and natural gas liquid reserves in North America.

Its acreage positions are concentrated in the Permian Basin of West Texas and New Mexico and the San Juan Basin of New Mexico and Colorado.

Back in June, Bob Simpson, the company’s board chair and chief executive officer, made a statement by purchasing 100,000 company shares. Trading at a ridiculously cheap 9.5 times estimated 2025 earnings is a potential total return grand slam.

Oil Near 18-Month Low and Ultra-High-Yield Energy MLPs Are On Sale

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