Enbridge also has an extensive natural gas pipeline system, a natural gas utility business, and renewable energy operations.Įnbridge’s pipeline operations generate stable cash flow backed by long-term contracts and government-regulated rates.
It transports 30% of the oil produced in North America.
EnbridgeĮnbridge operates one of the biggest oil pipeline systems in the world. They’ll collect a steady base dividend that’s sustainable throughout the oil price cycle and have the potential to earn significant payments during periods of high prices. Devon uses the rest of its excess cash to strengthen its balance sheet and repurchase shares.ĭevon’s dividend strategy makes it an enticing option for income-focused investors. It pays out as much as 50% of its excess cash flow each quarter via variable dividend payments after funding its fixed base dividend and capital expenses. The company launched an industry-first fixed-plus-variable dividend framework in 2021. The company’s diversification enables it to produce lots of low-cost oil and natural gas, which allows it to generate plenty of cash. It has diversified operations across several low-cost, oil-rich basins. These factors make it one of the safest E&P investments.ĭevon Energy is a U.S.-focused E&P company. ConocoPhillips routinely boasts one of the highest credit ratings among E&P companies, backed by a low leverage ratio for the sector and lots of cash. It plans to pay a steadily growing dividend, repurchase shares, and pay a variable return of cash based on its excess cash.įinally, the company complements its low-cost portfolio with a top-tier balance sheet. Given the uncertainty surrounding future oil demand, ConocoPhillips plans to return a significant portion of its free cash flow to investors in the coming years. With average costs of about $40 per barrel and many of its resources even cheaper, it can make money in almost any oil market environment, enabling the company to generate lots of cash flow.
It bulked up its position in that low-cost, oil-rich region in 2021 by acquiring Concho Resources and Shell’s assets in the area. It specializes in finding and producing oil and natural gas and has operations in more than a dozen countries.ĬonocoPhillips benefits from scale and access to some of the lowest-cost oil on earth, which includes significant exposure to the Permian Basin. ConocoPhillipsĬonocoPhillips is one of the largest E&P-focused companies in the world. Here’s a closer look at these top oil stocks.
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