Given the energy industry’s dependence on commodity prices, the sector tends to be cyclical and profitability can be highly variable. However, after the 50% plunge in oil prices in 2014, energy companies are now benefiting from the recovery through higher cash flows. Subsequently, shareholders have growing expectations that dividend payments could increase as cash flow recovers at these companies. Today I will share with you my list of high-dividend energy stocks you should consider for your portfolio.
CVR Energy, Inc. (NYSE:CVI)
CVI has a large dividend yield of 6.76% and pays out 74.06% of its profit as dividends , with the expected payout in three years being 79.42%. The company’s 6.76% dividend is both above the low risk savings rate and among the markets top payers. CVR Energy’s earnings per share growth of 848.99% over the past 12 months outpaced the us oil and gas industry’s average growth rate of 26.82%. Dig deeper into CVR Energy here.
Holly Energy Partners, L.P. (NYSE:HEP)
HEP has a enticing dividend yield of 9.03% and the company has a payout ratio of 111.92% . Over the past 10 years, HEP has increased its dividends from US$1.45 to US$2.60. They have been reliable as well, ensuring that shareholders haven’t missed a payment during this 10 year period. The company recorded earnings growth of 58.38% in the past year, comparing favorably with the us oil and gas industry average of 26.82%. Interested in Holly Energy Partners? Find out more here.
Delek US Holdings, Inc. (NYSE:DK)
DK has a sizeable dividend yield of 2.10% and the company has a payout ratio of 14.57% , with the expected payout in three years being 29.25%. While the yield has dropped at times in the last 10 years, dividends per share during this time have increased overall from US$0.15 to US$0.80. Comparing Delek US Holdings’s PE ratio against the US Oil and Gas industry draws favorable results, with the company’s PE of 9.2 being below that of its industry (12.5). More on Delek US Holdings here.
For more solid dividend paying companies to add to your portfolio, explore this interactive list of top dividend payers.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.