Many energy stocks are known for their lucrative dividends with the ability to sustain or raise their yield when crude oil prices are high.
With WTI crude oil prices spiking 4% today and currently near $94 a barrel it’s noteworthy that several Zacks Oils and Energy sector stocks are standing out with stellar dividend yields and the ability to benefit from the surging commodity price.
Quite a few Master Limited Partnerships (MLPs) stand out in particular with the recent surge in crude prices attributed to supply concerns as U.S. stockpiles fall.
Master Limited Partnerships
Two MLPs that may satisfy income-seeking investors and could see their stocks rise in the near future are Black Stone Minerals BSM and Kinder Morgan KMI.
Fiscal 2023 earnings estimates have remained 5% higher for Black Stone Minerals over the last 60 days with FY24 EPS estimates soaring 14%. Managing oil and natural gas mineral interests primarily in the U.S., Black Stone Minerals’ offers an 11.03% dividend yield at the moment and trades attractively at 9.2X forward earnings.
Earnings estimates are slightly up for Kinder Morgan over the last 30 days with the company being a leading midstream energy infrastructure provider in North America transporting crude oil, natural gas, and refined petroleum among other products.
Kinder Morgan’s stock trades reasonably at a 14.9X forward earnings multiple with a 6.86% dividend yield that is slightly above its industry average and towers over the S&P 500’s 1.50% average.
Alternative Energy Limited Partnership
High crude oil prices make less expensive alternative energy sources more attractive and have brightened the prospects for NextEra Energy Partners NEP which is a growth-oriented limited partnership (LP) operating contracted clean energy projects.
Over the last 60 days, NextEra Energy Partners’ FY23 and FY24 EPS estimates are up 4% and 8% respectively. It’s also noteworthy that analysts appear to be very bullish on NextEra Energy Partners stock with the Average Zacks Price Target of $74.45 a share suggesting 59% upside from current levels. Plus, NextEra Energy Partners’ dividend yield is at a very generous 7.28%.
Bottom Line
Rising earnings estimates correlate with higher crude oil prices making these Master Limited Partnerships and Limited Partnership very attractive as they offer stellar dividends and their stocks looked poised for more short-term upside.
Kinder Morgan, Inc. (KMI): Free Stock Analysis Report
NextEra Energy Partners, LP (NEP): Free Stock Analysis Report
Black Stone Minerals, L.P. (BSM): Free Stock Analysis Report
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