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3 Energy Stocks I'm Eyeing in 2025
The Motley Fool· 2025-08-05 17:41
Core Viewpoint - The article highlights three high-yield energy stocks: Chevron, Enterprise Products Partners, and TotalEnergies, emphasizing their potential to meet global energy demand and provide attractive returns to investors. Chevron - Chevron has resolved recent uncertainties related to a merger with Hess and its investment in Venezuela, which had negatively impacted its stock [3] - The company offers an above-average dividend yield of 4.5%, compared to the average energy stock yield of 3.4% [3] - Chevron's integrated business model and strong balance sheet contribute to its resilience in the volatile energy sector, with a history of increasing dividends for 38 consecutive years [4] Enterprise Products Partners - Enterprise Products Partners provides a high yield of 7%, with a track record of increasing distributions for 26 years [6] - The company operates in the midstream sector, owning energy infrastructure assets like pipelines, which generates reliable cash flows through fee-based revenue [7] - Its investment-grade balance sheet and a distributable cash flow that covers distributions by 1.7 times indicate financial stability [6] TotalEnergies - TotalEnergies is an integrated energy company that uses more leverage compared to Chevron but maintains a strong position in the market [8] - The company offers a yield of 6.5%, although U.S. investors face French taxes on this payment, which can reduce the effective yield [9] - TotalEnergies is actively investing in electricity and clean energy, positioning itself for future market shifts and mitigating long-term risks associated with carbon-based energy [9] Investment Options - Chevron is suitable for long-term investors seeking direct exposure to commodity prices [10] - Enterprise Products Partners is ideal for investors wanting to avoid commodity exposure while still benefiting from the energy sector [10] - TotalEnergies appeals to those who believe in the potential of clean energy investments alongside traditional oil operations [10]