Energy Stocks to Watch in 2025
Chevron stands out as a major player in the energy sector with promising prospects for the future.
On another front, Enterprise Products Partners is recognized for its high yields and focus on natural gas, making it a significant midstream entity.
Then there’s TotalEnergies, an integrated energy firm gearing up for a future that includes more emphasis on electricity.
I’ve been thinking quite a bit about energy stocks lately. I mean, we all rely on energy, right? It’s hard to imagine life without it. But oil and natural gas, surprisingly, don’t get as much recognition these days. So, I’ve had my eye on Chevron, Enterprise Product Partners, and TotalEnergies as we approach 2025. Let’s break down what makes each of them noteworthy.
Chevron has faced its fair share of challenges recently. There was that merger attempt with Hess that didn’t quite pan out, and then issues regarding its investments in Venezuela turned into a bit of a circus. Thankfully, those matters seem resolved now. Still, Chevron boasts a dividend yield of 4.5%, which is quite appealing—especially when you consider the average for energy stocks hovers around 3.4%.
What’s intriguing about Chevron is its integrated business model. It tends to withstand the ups and downs of the energy market better than many. Plus, their solid balance sheet supports a dividend that has increased for an impressive 38 consecutive years. If you’re on the hunt for a reliable energy stock, diving deeper into Chevron may be worthwhile.
Enterprise Products Partners, on the other hand, has some notable advantages—a yield that stands out at around 7%. But don’t mistake a higher yield for increased risk. This company has consistently raised its distributions for 26 years. Its balance sheet is rated investment grade, and its cash flow comfortably supports what it pays out, at a ratio of 1.7:1.
The essence of Enterprise’s operation lies in its midstream activities, owning vital energy infrastructure like pipelines. They simply collect fees for using these assets, creating a steady cash flow that remains crucial, especially as the demand for energy continues unabated. For investors who want to distance themselves from the risks associated with energy products, this makes Enterprise an attractive option.
Similarly, TotalEnergies operates as an integrated energy giant. However, it leans a bit more on leverage compared to its European counterparts and tends to hold more cash. While not as risky as Chevron’s almost debt-free strategy, TotalEnergies is a solid choice in the integrated energy realm.
It’s important to consider a couple of things here. Yes, the appealing 6.5% yield isn’t quite as favorable for U.S. investors after accounting for French taxes on dividend payments. Still, TotalEnergies aggressively backs investments in electricity and cleaner energy solutions. I find that admirable—they’re positioning themselves for a shift that could mitigate long-term risks in the energy sector.
In terms of energy investments, there’s no one-size-fits-all approach, especially when you’re after high-yield options. Chevron might be a reasonable pick for those looking for direct exposure to energy prices. Alternatively, Enterprise Products Partners offers a more conservative route, steering clear of these price fluctuations. And if you see clean energy as the future, TotalEnergies could be a compelling option as well.
Just keep all this in mind before making any decisions about investing in Chevron.
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