Unlock a Stream of Passive Income with These 3 Energy Stocks
The S&P 500 may be hovering near record highs, but savvy investors know that the real opportunities lie in undervalued sectors like energy. With valuations at historic lows and yields reaching attractive levels, now is the perfect time to invest in high-yield dividend stocks.
ConocoPhillips: A Leader in Exploration and Production
As the largest U.S.-based independent exploration and production company, ConocoPhillips boasts a highly efficient production portfolio that can break even at relatively low oil and gas prices. With its recent acquisition of Marathon Oil, the company expects to achieve significant cost synergies, further reducing its production costs. Sporting a solid 3.1% yield, ConocoPhillips is poised to deliver even more passive income to investors, with a dividend growth rate expected to be in the top 25% of S&P 500 companies.
Kinder Morgan: A Midstream Powerhouse
Kinder Morgan’s stock surged over 50% in 2024, driven by years of underperformance, growing earnings, and a shift in sentiment toward its long-term growth projects. As a midstream energy company, Kinder Morgan operates critical infrastructure assets, connecting areas of hydrocarbon production to areas of processing, distribution, and consumption. With a yield of 4.1%, investors can expect a significant stream of passive income from this undervalued stock.
Phillips 66: A Downstream and Midstream Play
Phillips 66 operates in both the downstream and midstream segments of the oil and gas value chain. Despite a recent downturn in refining margins, the company remains incredibly profitable, with a dividend yield of 4% and a price-to-earnings ratio of just 14.8. With consensus analyst estimates calling for $9.33 in 2025 earnings per share, roughly double the dividend, Phillips 66’s payout is affordable and sustainable.
Investing in These 3 Stocks Could Generate $112 in Passive Income in 2025
By investing $1,000 in each of these three high-yield dividend stocks, investors can expect to generate approximately $112 in passive income in 2025. With their attractive valuations, high yields, and strong growth prospects, ConocoPhillips, Kinder Morgan, and Phillips 66 are compelling buys for value and passive-income investors.
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