Dividend stocks haven't given investors much love this year. Dividend cuts are at their highest level since the financial crisis, as more than 750 companies, including over 60 members of the S&P 500, have reduced or suspended their payouts because of the impact COVID-19 is having on the economy.

However, while this year has been tough on dividend investors, there are still some enticing options out there for those who love income. We asked some of our contributors for their favorite ideas, and they dug through the rubble and found some gems in an unlikely sector: energy. While COVID-19 hit the sector especially hard, our contributors see a lot to love about the payouts of midstream MLP Enterprise Products Partners (NYSE:EPD), refiner Phillips 66 (NYSE:PSX), and utility NextEra Energy (NYSE:NEE).

A man in a suit with money symbols in one hand and hearts in the other.

Image source: Getty Images.

It's really not that bad

Reuben Gregg Brewer (Enterprise Products Partners): COVID-19 demand disruptions in the energy patch have definitely hit Enterprise Products Partners' top and bottom lines. Operating income was off by 8% in the second quarter, with distributable cash flow down nearly 8.5%. And low oil prices, if they linger, could lead to slower growth in the years ahead. So there's a reason why the master limited partnership's units are down nearly 40% so far in 2020.

The company offers a 10% distribution yield, so investors appear to be pricing in a lot of bad news. Only things don't actually seem all that terrible.

Enterprise Products Partners covered its distribution by 1.6 times in the quarter, leaving a lot of room for it to handle further adversity. The industry bellwether is one of the largest and most diversified midstream players in the domestic market and it's already seeing improvement in some of its key businesses. And with around 85% of Enterprise's business tied to fees, investors don't need to worry too much about the often volatile price of oil and natural gas -- demand for these still-vital fuels is more important to the partnership's performance.  

It wouldn't be true to suggest that Enterprise Products Partners is sailing through the energy downturn without any trouble. However, investors appear to be taking too dour a mood here, opening up an opportunity for income-focused investors looking for high-yield bargains.

A safer way to invest in oil

Daniel Foelber (Phillips 66): Phillips 66 is one of the top U.S. refiners. Instead of depending on oil prices to make money, refineries are in the business of buying crude oil and turning it into refined products like diesel, jet fuel, and gasoline. Similarly, petrochemical plants make money by turning crude oil into useable products, namely plastics, as well as pesticides and fertilizers, paints, coatings, and more. 

Even with less exposure to oil prices, Phillips 66 is hurting from a drop off in demand for refined products due to the COVID-19 pandemic. As a result, it's been running its refineries at reduced utilization rates -- in the low 80% range, when it normally runs them in the high 90% range. However, as the economy gradually reopens, increased demand for refined products and petrochemicals should make Phillips 66 one of the first energy stocks to benefit. In the meantime, investors can sleep well at night knowing that Phillips 66 isn't as vulnerable to the price of oil as upstream oil stocks.

In terms of long-term growth, Phillips 66 sees potential in alternative fuels. It's taking advantage of California's appetite for renewable diesel by converting its San Francisco Refinery into the world's largest renewable fuels plant by 2024.

With shares down nearly 50% for the year and a dividend yield of 5.8%, Phillips 66 looks like a good long-term investment right now.

An ideal energy-powered dividend

Matt DiLallo (NextEra Energy): NextEra Energy has been an exceptional dividend stock over the years. Since 2004, the company has grown its payout at a 9.4% compound annual rate. It sees more high-powered dividend growth ahead and is projecting about 10% annual increases through at least 2022.

Several factors power that bright forecast. First, the company generates very stable cash flow, thanks to the stability of its utility operations and the contractual backing of its renewable energy and natural gas pipeline operations. That durability was on full display this year as NextEra's earnings were immune to the impacts of COVID-19.

Meanwhile, the company complements that stable earnings profile with top-notch financials, which gives it the flexibility to increase its dividend as it invests in expanding its operations. It boasts a conservative dividend payout ratio (60% versus the peer group average of 65%) and one of the highest credit ratings in the utility sector.

Finally, it has a significant expansion project backlog at its two Florida-based utilities and within its energy resources segment as it builds new renewable-energy assets and natural-gas pipelines. Those growth drivers should enable the company to expand its earnings per share by about 8% per year through 2022.

NextEra has everything a dividend lover could want. It offers a rock-solid above-average yield (2% vs. the S&P 500's average of 1.7%), with visible growth prospects. Because of those characteristics, it's a great buy for those seeking a durable income stream.