Energy Business

5 Top Energy Stocks to Buy With Super-Safe Dividends

If there is one sector that looks like a great play for the rest of 2017 and into next year, it is energy, and with good reason. Energy has horribly underperformed the S&P 500, which is up over 16% his year, and all signs point to the supply/demand equation to be in much better balance going forward. Toss in the possibility that OPEC may continue its production cutbacks, and the outlook seems much brighter.

When covering recent Barron’s articles, the research team at Stifel noted that while increases in energy dividends are coming in at a slow pace, they are at least consistent. They also pointed to five companies that were not master limited partnerships (MLPs) that rank among the highest in the energy sector for dividend safety.

We cross-referenced the five against our 24/7 Wall St. research database looking for Wall Street firms that have Buy ratings on the companies. We found them, and they all make good sense for long-term growth and income accounts.

Exxon Mobil

This company remains a top Wall Street energy pick and is still down over 15% in 2017. 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, Asia, Australia and Oceania. It 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.

For 75 years in a row, Exxon Mobil has raised its dividend on a split-adjusted basis. Thanks to the company’s vertically integrated model in the oil and gas business, its profitability doesn’t suffer through commodity price swings like a company that’s a pure play in one segment of the value chain.

Shareholders receive a nifty 3.7% dividend. Merrill Lynch has a $90 price objective for the shares, while the Wall Street consensus target price is $83.40. The stock closed Tuesday at $83.24 per share.

Valero Energy

Only 17% of institutional funds currently own this Wall Street and RBC favorite. Valero Energy Corp. (NYSE: VLO) is the largest independent petroleum refining and marketing company in the United States. It is based out of San Antonio, owns 13 refineries in the United States, Canada and Europe, and has total throughput capacity of around 2.5 million barrels per day.

RBC analysts lifted their 2017 estimated earnings to $5.88 per share from $3.49, while the 2018 estimate went from $4.29 to a gigantic $8.18, an increase of a stunning 91%.

Investors of Valero Energy are paid a 3.62% dividend. The $77 RBC price target was raised to a whopping $88, and the posted consensus target is lower at $80.29. The shares closed most recently at $77.40 apiece.

Sponsored: Tips for Investing

A financial advisor can help you understand the advantages and disadvantages of investment properties. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.

Investing in real estate can diversify your portfolio. But expanding your horizons may add additional costs. If you’re an investor looking to minimize expenses, consider checking out online brokerages. They often offer low investment fees, helping you maximize your profit.