3 Top Energy Stocks to Buy as 2024 Draws to a Close

Core Insights - Energy stocks have shown solid performance in 2023, with an average increase of 14% in the S&P 500, despite weaker oil and gas prices [1] - Energy demand is expected to grow in 2025 and beyond, making several energy stocks attractive long-term investments as 2024 concludes [2] Company Summaries Black Hills Corporation - Black Hills is a regulated utility serving 1.3 million customers across several states, focusing on reliable energy provision [3] - The company has a strong track record, increasing its dividend for 54 consecutive years and paying dividends for 82 years, qualifying it as a Dividend King [4] - With a solid investment-grade balance sheet and $4.3 billion in capital spending plans, Black Hills is well-positioned for growth, focusing on system modernization and capacity development [5] - The company offers a historically high dividend yield of 4%, significantly above the S&P 500's 1.2% and the average utility's 2.8% [6] Western Midstream Partners - Western Midstream Partners is projected to grow its adjusted EBITDA to $2.3 billion, an 11% increase year-over-year, and free cash flow is expected to rise by 19% to nearly $1.2 billion [7] - The company has improved its leverage ratio to 3.0 times, a 0.7x improvement from the previous year, aided by acquisitions and asset sales [8] - It has raised its quarterly distribution rate to $0.875 per unit, a 52% increase, resulting in a yield of over 9% [9] - The company plans to invest $700 million to $850 million in capital projects, enhancing its cash flow growth potential [10] - Western Midstream has the financial flexibility for further acquisitions and unit repurchases, supporting continued distribution increases [11] - The MLP structure offers significant tax advantages for investors [12] Brookfield Renewable - Brookfield Renewable is on track for a record year, with funds from operations (FFO) per unit growing by 7% year-to-date and 11% in Q3, targeting over 10% FFO growth in 2024 [13] - The company is capitalizing on asset recycling, generating nearly $2.3 billion from asset sales, which funds its growth initiatives [14] - Management anticipates 2024 will be its most successful year for asset recycling, with planned investments of $8 billion to $9 billion over the next five years, targeting at least 10% annual FFO growth and 5% to 9% annual dividend growth [15]