A Spot of Income: Three Energy Stocks

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Now, if one finds oneself in the agreeable position of desiring a dividend – and who doesn’t, really? – the energy sector, my dear fellow, presents a positively ripping good starting point. It’s a bit like finding a perfectly brewed cup of tea when one is feeling decidedly peckish for a bit of financial comfort. We shall, therefore, investigate three companies currently offering yields that are, shall we say, rather more substantial than a mere nod of approval.

1. Enbridge

Enbridge (ENB +1.68%) is, if you will, a most dependable sort. Offering a forward dividend yield of 5.6%, the company has been steadily increasing its payout for a positively impressive 30 years – a feat that would make even the most seasoned club treasurer raise an eyebrow. And, crucially, it continues to generate free cash flow with the sort of cheerful regularity that suggests a well-oiled machine.

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Now, while one might categorize Enbridge as a simple ‘energy’ stock, it’s rather more nuanced than that. It’s also, you see, a utility – a provider of the essentials, if you will. With over 18,000 miles of liquids pipelines and a similarly impressive network for natural gas, it’s a veritable artery of the North American continent. And, in a dash of forward thinking, they’ve even ventured into renewable energy, with projects capable of generating over 7.2 gigawatts of electricity. Rather clever, what!

A spot of bother recently arose, with JP Morgan (JPM +0.77%) issuing a downgrade due to sluggishness in the crude oil business. However, one shouldn’t fret unduly. While a dazzling burst of growth may not be on the cards, Enbridge promises a most agreeable degree of stability and a reliable income stream – a bit like a comfortable armchair on a rainy afternoon.

2. Energy Transfer

If the midstream business of Enbridge strikes a pleasing chord, you’ll likely find Energy Transfer (ET 0.22%) equally appealing. This limited partnership operates a truly staggering network of over 140,000 miles of pipeline across the U.S., transporting everything from crude oil to refined products. It’s a bit like a vast, subterranean network of thoroughfares, ensuring the smooth flow of energy across the nation.

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The distribution yield of 7.3% is, shall we say, a particularly handsome figure for those seeking income. And, rather wonderfully, the boom in data centers – fueled by the insatiable appetite of artificial intelligence – is providing a most agreeable tailwind. Energy Transfer has secured agreements to supply natural gas to several data center operators, including CloudBurst, Fermi America (NASDAQ: FRMI), and Oracle (ORCL 5.11%). A most fortuitous development, wouldn’t you agree?

3. Enterprise Products Partners

Enterprise Products Partners (EPD +1.65%) is another midstream leader that has consistently delivered income for its investors. Its distribution yield of roughly 6.3% is, again, a most attractive proposition. And, remarkably, the company has increased its distribution for an impressive 27 consecutive years. A record that speaks for itself, what!

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Like Energy Transfer, Enterprise Products Partners is also benefiting from the surge in demand from the AI sector. The company has approximately $4.8 billion of projects under construction, designed to capitalize on these opportunities. Several of these projects are slated to come online in 2026.

One shouldn’t expect a whirlwind of growth this year, however. CEO Randy Fowler recently acknowledged that only “modest growth” is anticipated for 2026. Nevertheless, management projects a healthy 10% increase in earnings before interest, taxes, depreciation, and amortization (EBITDA) and cash flow in 2027. A perfectly reasonable outlook, all things considered. A bit like a well-managed estate, providing a steady income for years to come.

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2026-02-05 11:03