Ever since oil prices started to fall in mid-2014, the energy industry has been in something of a funk. But that's opened up some opportunities for dividend investors willing to take on a little risk. With oil stabilizing in the $50 per barrel range, now could be a good time to do a deep dive on high-yielding Royal Dutch Shell plc (NYSE:RDS.A) (NYSE:RDS.B) and Buckeye Partners, L.P. (NYSE:BPL), two energy players that pay you very well to own them.

The major

Royal Dutch Shell is one of the world's largest integrated oil and natural gas majors. Its business spans the globe and the energy industry, including drilling, refining, and chemicals. It currently offers an impressive 6% dividend yield.

A man with a notebook standing in front of an oil well

Image source: Getty Images.

What's got investors worried right now is the company's debt load. During the oil downturn, Shell made a strategic acquisition that meant increasing debt by roughly 50% in 2016. The company isn't blind to the issue, though, clearly articulating that debt reduction is a key priority. And there's a yardstick by which to measure Shell's success: The company announced that it plans to trim its debt by some $30 billion by selling non-core assets. The results? It already has roughly $25 billion worth of asset sales inked or completed.    

Even more exciting than management following through on its debt goals is the company's financial performance. For example, despite oil prices remaining well off their 2014 highs, over the trailing year through June, Shell generated enough cash flow to cover its dividend and debt reduction efforts. So not only is it keyed in on debt reduction, but it looks well prepared for a "lower for longer" oil price environment as well. The big acquisition was part of preparing for that scenario, but Shell has also been trimming costs and focusing only on its best capital projects.    

A bar chart showing Shell's cash flow

Shell's cash flow breakdown over the past 12 months. Image source: Royal Dutch Shell plc. 

Shell is proving through action that it can not only survive in the current oil market, but it can thrive. It still has some work to do on the debt front, since big asset sales take time to work out and complete. But if you are looking to get paid, Shell's 6% dividend yield looks pretty solid.

A small fry

Midstream energy partnership Buckeye Partners, with a market cap of $8 billion, is a pipsqueak compared to $250 billion Shell. And while it operates on a global scale, it's highly focused on the storage business. So you lose out on a lot diversification, here. But Buckeye offers a huge 8.8% yield backed by 22 years of distribution increases, including yet another hike in the second quarter.  

Interestingly enough, Buckeye's weak unit price lately is also related to a big acquisition. In this case, the deal was the $1.15 billion purchase of a 50% stake in VTTI. Buckeye is also on the hook for another $236 million (funded 50% with debt and 50% with units) to help VTTI finance a structural change in its business. So, the partnership's leverage has been increasing, its distribution coverage fell below 1 in the second quarter, and investors have, understandably, stepped back from the units.  

Two bar charts showing Buckeye's chanding business

Buckeye's business has changed materially since 2010, and the VTTI acquisition pushes it into even more global markets. Image source: Buckeye Partners, L.P.

However, Buckeye has been through similar periods before. For example, distribution coverage fell below one in 2013 and 2014 as Buckeye was investing for the future and expanding its business. Around 30% of the $8 billion in investments the partnership has made since 2010 occurred in just those two years. Distribution coverage was back above one in 2015 and 2016, though, as its investments began to bear fruit.  

If history is any guide, Buckeye will keep supporting its distribution, and the current investments will eventually pan out just like the ones before. And you can collect a fat yield while you wait.

A little more risk, a little less

There's clearly risks involved with owning either Shell or Buckeye, with growth-minded acquisitions playing a crucial role at each. Shell appears further along in its efforts to get its business back to normal, with Buckeye really only just starting along that journey. But if you can see the long-term appeal of the moves these energy players have been making, and keep a close on their progress in getting things back to normal, then you might want to find a place in your portfolio for their hefty yields.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.