Investing

6 Energy Stocks With Ultra-Yield Dividends to Buy in December

Lee Jackson

Published: December 13, 2023 9:10 am

The setup for the benchmark Oil indices of Brent Crude and West Texas Intermediate to soar over $100 was all in place. Massive Saudi and OPEC+ production cuts, U.S producers halting drilling in some regions, and then the perfect storm: a Hamas attack on Israel, which started yet another war in the oil-rich Middle East.

Did Oil explode to $100 and higher? Hardly, demand concerns and a weakening Chinese economy future started the selling. Add in Russian exports increasing in addition to rising inventories. Short-sellers are pounding the stocks on demand concerns, and you have just a few of the issues that have sent oil prices for both of the significant benchmarks back to levels last seen in July.

So what happens now? The Saudi Arabian government and OPEC+ have zero interest in oil staying at current levels, and there are a few scenarios that could play out for those looking to grab energy stocks now, with some at their lowest levels in almost four months.

The Saudi Arabian government and OPEC+ have said they will continue their production cuts deep into 2024 but will cut output even more.

The Middle East war gets more intense and spreads, and production all over the region is hampered.

Iran gets involved in the conflict and blocks or slows traffic in the Strait of Hormuz.

We screened our 24/7 Wall Street energy stock research database and found 6 top companies that are all ‘Strong Buy’ rated by leading Wall Street analysts and pay big, dependable, ultra-yield dividends.

BP

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This company is a premier European integrated oil giant, paying shareholders a hefty 4.72 % divided. BP p.l.c. (NYSE: BP) engages in the energy business worldwide. It operates through Gas & Low low-carbon energy, Oil Production and operations, Customers and products, and Rosneft segments.

BP produces and trades in

• Natural gas
• Biofuels,
• Operates onshore and offshore wind and solar power-generating facilities
• Provides de-carbonization solutions and services, such as hydrogen and carbon capture, usage, and storage

The company is also involved in the convenience and mobility business, which manages the sale of fuel to

• Wholesale and retail customers
• Convenience products,
• Aviation fuels
• Castrol lubricants
• Refining, Supply
• Trading of oil products
• operation of electric vehicle charging facilities.

In addition, it produces and refines oil and gas and invests in upstream, downstream, and alternative energy companies, as well as in advanced mobility, bio and low carbon products, carbon management, digital transformation, and power and storage areas.

Devon Energy

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This energy company utilizes the variable dividend strategy to pay investors a massive 6.56% dividend. Devon Energy Corporation (NYSE: DVN) is an independent energy company that primarily engages in the exploration, development, and production of oil, natural gas, and natural gas liquids (NGLs) in the United States and Canada. It operates approximately 19,000 wells.

The company also offers midstream energy services through natural gas pipelines, plants, and treatment facilities, including gathering, transmission, processing, fractionation, and marketing to natural gas producers, NGLs, crude oil, and condensate producers.

Production is weighted toward crude oil, while growth opportunities are liquids-focused – anchored by the following:

• Delaware Basin,
• SCOOP/STACK,
• Eagle Ford Shale,
• Canadian Oil Sands and the
• Barnett

Devon also owns equity in the publicly traded midstream MLP EnLink (NYSE: ELNK)

Diamondback Energy

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This red-hot energy play looks poised to press higher again. Diamondback Energy, Inc. (NASDAQ: FANG) is an independent oil and natural gas company focused on the acquisition, development, exploration, and exploitation of unconventional and onshore oil and natural gas reserves in the Permian Basin in West Texas.

Diamondback Energy is focused on developing

• Spraberry and Wolfcamp formations of the Midland Basin
• Wolfcamp and Bone Spring formations of the Delaware Basin are part of the Permian Basin in West Texas and New Mexico.

The company also owns, operates, develops, and acquires midstream infrastructure assets, including 770 miles of crude oil gathering pipelines, natural gas gathering pipelines, and an integrated water system in the Midland and Delaware Basins of the Permian Basin.

Investors are paid a stellar 4.58% dividend, which is also of the variable variety, which means it could change depending on production and profits.

Enterprise Products Partners

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This company is the most significant publicly traded energy partnership and a leading North American provider of midstream energy services to producers and consumers. Enterprise Products Partners L.P. (NYSE: EPD) provides various midstream energy services, including:

• Gathering
• Processing,
• Transporting
• Storing natural gas
• Natural gas liquids
• (NGL) fractionation
• Import and export terminalling
• Offshore production platform services.

The company has four reportable business segments:

• Natural Gas Pipelines and Services
• NGL Pipelines and Services
• Petrochemical Services
• Crude Oil Pipelines and Services

Enterprise investors are paid a strong 7.50% distribution.

Exxon Mobil

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This mega-cap energy leader trades just above a 52-week low, offering investors a dependable 3.78% dividend. Exxon Mobil Corporation (NYSE: XOM) explores and produces crude oil and natural gas in the United States and internationally.

Exxon Mobil operates through:

• Upstream
• Energy
• Chemical
• Specialty Products segments

The Upstream segment explores and produces crude oil and natural gas.

The Energy Products segment offers fuels, aromatics, catalysts, and licensing services.

The Chemical Products segment manufactures and markets petrochemicals, including olefins, polyolefins, and intermediates.

The Specialty Products segment offers performance products, including lubricants, basestocks, waxes, synthetics, elastomers, and resins.

Exxon Mobil is also involved in the

• Manufacturing,
• Trading
• Transporting
• Selling of crude oil, natural gas, petroleum products, petrochemicals, and other specialty products

Pioneer Natural Resources

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This is a stock many Wall Street analysts love for a pure crude oil play that employs a variable dividend strategy and pays a massive 6.18% dividend. (NYSE: PXD) operates as an independent oil and gas exploration and production company in the United States.

The company explores, develops, and produces oil, natural gas liquids (NGLs), and gas. It has operations in the Midland Basin in West Texas.

Pioneer production services are supported by 100 well-servicing rigs, more than 100 cased-hole, open-hole, offshore wireline units, and advanced coiled tubing units.

In October, Exxon Mobil Corporation and Pioneer Natural Resources jointly announced a definitive agreement for ExxonMobil to acquire Pioneer. The merger is an all-stock transaction valued at $59.5 billion, or $253 per share, based on ExxonMobil’s closing price on October 5, 2023. Under the terms of the agreement, Pioneer shareholders will receive 2.3234 shares of ExxonMobil for each Pioneer share at closing. The implied total enterprise value of the transaction, including net debt, is approximately $64.5 billion.