Despite the impact of the pandemic in recent years, oil and gas prices have reached high levels in 2022. So this has proved lucrative for leading oil and gas companies worldwide
and attracting investor’s eye on the sector. The article lists 5 US oil stocks with high dividends.
Sector overview
The energy sector, especially the oil and gas industries play a key role in the world economy as primary sources. However, the operation of these industries requires capital-intensive investments, high level of technology and complexity.
In general, the industry is divided into three segments:
- „upstream” the segment of oil and gas exploration and production;
- „midstream” transportation and refining; and
- „downstream” which includes distribution and marketing.
The petroleum industry plays a major role in the U.S economy, in addition it has always been crucial to meeting the energy needs of the global economy.
Historically, the total U.S. crude oil production went down from 1985 to 2008. However, there was a change in crude oil production that resulted in an increase in annual oil production roughly every year from 2009 through 2019.
The production has reached the highest amount in 2019, however as early as 2018, the U.S. has become the world’s top crude oil producer. The oil industry produced 4.47 billion barrels of crude oil in 2019, making U.S. oil production in 2019 about 2.5 times higher than in 2008.
Under these circumstances, the U.S crude oil industry faced the economic impact of COVID-19 pandemic, which led to a drop in production between 2020 and 2021 due to the lack of sufficient demand.
After the normalization of pandemic situation, the oil and gas industry has made a strong recovery, the oil price has reached high level. Moreover, the military conflict in Ukraine and as a side effect, the energy crisis may keep prices permanently on high level, attracting investor’s eye on the sector.
Oil stocks with high dividends and in general, dividends from oil companies are an attractive investment for several reasons. Firstly, these companies offer a high yield, which means that investors can earn a significant return on their investment. Additionally, oil companies tend to be quite stable and profitable, as a result investors can count on receiving their dividends even in down markets.
It has compiled a list of compelling choices using Yahoo Finance Stock Screener. If you’re looking for an investment that offers steady cashflow and stability, these oil stocks with high dividends are a great option to consider.
| Ticker | Company | Market cap | Sector | Industry |
|---|---|---|---|---|
| NYSE XOM | Exxon Mobil Corporation | US$366,9 billion | Energy | Oil & Gas Refining |
| NYSE PSX | Phillips 66 | US$40,7 billion | Energy | Oil & Gas Refining |
| NYSE WMB | The Williams Companies Inc. | US$39,4 billion | Energy | Oil & Gas Midstream |
| NYSE EPD | Enterprise Products Partners L.P. | US$55,7 billion | Energy | Oil & Gas Midstream |
| NYSE MMP | Magellan Midstream Partners, L.P. | US$10,3 billion | Energy | Oil & Gas Midstream |
Source: Yahoo Finance database
TOP 5 US oil stocks with high dividends.
5. Exxon Mobil Corporation (Ticker NYSE XOM) – U.S.
Market capitalization: US$366,9 billion, forward annual dividend yield: 4,04%, P/E 14,44
Exxon Mobil Corporation engages in the exploration, development, and distribution of oil, gas, and petroleum products. It operates through 3 segments: Upstream, Downstream and Chemical. Hence the company operates 37 oil refineries in 21 countries constituting a combined daily refining capacity of 6.3 million barrels (1,000,000 m3), with it is the seventh largest refiner in the world. In addition, the company was ranked sixth in the most recent released Fortune 500. Headquarter: Irving, Texas.
There are typically 4 dividends per year in every 4 quarters. 5 Year Average Dividend Yield: 5,39%