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2 Energy Stocks to Consider Instead of Crude Oil
The Motley Fool· 2026-03-17 01:15
Core Viewpoint - The geopolitical conflict in the Middle East is causing fluctuations in oil prices, impacting energy markets and commodity prices, with a recommendation to consider investing in Enterprise Products Partners and Enbridge as alternatives to direct oil investments [1]. Group 1: Company Overview - Enterprise Products Partners and Enbridge operate in the midstream segment of the energy sector, focusing on energy infrastructure such as pipelines, which facilitate the movement of oil and natural gas globally [2]. - Both companies generate reliable cash flows regardless of oil price fluctuations, exemplified by Enterprise's 27 consecutive distribution increases and Enbridge's 31 annual dividend hikes [4]. Group 2: Investment Appeal - Enterprise Products Partners offers a distribution yield of 5.8%, while Enbridge provides a dividend yield of 5.2%, making them attractive options for dividend investors in the energy sector [5]. - Investing in these companies allows for exposure to the energy sector without the volatility associated with commodity prices, as they are not directly tied to oil drilling operations [9]. Group 3: Company Specifics - Enterprise Products Partners has a market capitalization of $80 billion, with a gross margin of 12.86% and a current price of $37.32 [7]. - Enbridge has a market capitalization of $118 billion, a gross margin of 32.74%, and a current price of $54.54 [8]. - The companies are not interchangeable; Enterprise is a master limited partnership (MLP) with tax implications, while Enbridge has diversified interests including regulated natural gas utilities and a small clean energy business [7].