Energy stocks have been red-hot this year, but if you think you missed the bus, you might want to check out some energy stocks that are flying under the marker's radar. Here are three solid energy stocks that haven't gotten as much love yet but look primed for a rebound, given their dividend and growth potential. 

Dividend increases should drive share price

Xcel Energy (XEL 0.44%) shares are barely in the green so far this year, but a utility stock with defined growth goals deserves better. To put some numbers to that, Xcel Energy's long-term financial goals include:

  • Earnings per share growth of 5%-7%.
  • Annual dividend increase of 5%-7%.
  • Dividend payout ratio of 60%-70%.
  • A high credit rating.

Xcel Energy has increased its dividend every year since 2005, but growth has accelerated in recent years. To drive its EPS and dividend growth through 2025, Xcel Energy is banking on two things: an above 6% growth in base rate and capital spending worth nearly $23.5 billion, and significant investment in clean energy. In fact, Xcel aims to deliver 100% carbon-free electricity by 2050 and power 1.5 million electric vehicles by 2030. The company has nearly 3.7 million electricity customers and 2.1 million natural as customers across eight western and Midwestern U.S. states.

Workers inspecting solar panels with wind turbines in the background.

Image source: Getty Images.

If you combine the EPS and dividend growth averaging 6% per year and a dividend yield of around 2.6%, Xcel Energy shares could easily deliver attractive high-single-digit shareholder returns, which should reflect in its share price. The stock has had a solid run-up in recent decades, and it could do so again if it can keep its dividend streak alive -- which I believe it will.

The economy's reopening should benefit this oil stock

Phillips 66 (PSX 1.51%) is a leading oil refining company, but refining has been one of the worst-hit patches in the oil and gas industry during the coronavirus pandemic as demand for refined products like diesel, gasoline, and aviation fuel tanked. Not surprisingly, Phillips 66 shares haven't had the kind of dream run many energy stocks have enjoyed this year, also partly because Phillips 66 hasn't increased its dividend since January 2020, triggering fears it might break its nine-year streak of annual dividend increases.

Fortunately, Phillips 66 is already looking at better days for two reasons: its focus on deleveraging and the economy's reopening. After adding roughly $4 billion in debt over the last year, management is now intently focused on bringing debt back to its pre-pandemic level of around $12 billion. To pare debt, Phillips 66 will taper growth capital expenditure to free up more cash even as higher oil prices should keep its midstream and chemicals businesses humming. For perspective, Phillips 66 expects to spend only $600 million on growth this year.

As for dividend, management stressed on the Q1 earnings call that it is "committed to a secure and growing dividend," and that it plans to increase the dividend again and resume share repurchases once the company is closer to pre-pandemic debt levels. Importantly, investors should be encouraged by management's priority to build a strong financial profile, as it's a key deciding factor to pick an oil and gas stock.

Meanwhile, the vaccine rollout is expected to boost demand for consumer products and travel. Phillips 66, in fact, said it's bullish about the second half of the year as demand for diesel and gasoline are already back to 2019 levels. In all, Phillips 66 might surprise the market in coming months, giving the 3.9%-yielding stock a boost.

This top renewable energy stock deserves your attention

If you're lookin for a rock-solid, value renewable energy stock, look no further than Brookfield Renewable Partners (BEP 1.40%) (BEPC 2.46%). This stock is a treat for growth and dividend investors alike, but it's still down about 9% year to date. 

Brookfield Renewable Partners is not only one of the largest renewable energy companies in the world but also among the most diversified within the industry. So after establishing itself as a leading hydropower player, Brookfield is now diversifying aggressively into solar and wind. There's tremendous opportunity there, and Brookfield already has a growth blueprint ready.

Here's the biggest number you must know: As of the end of the first quarter, Brookfield Renewable had an existing operating capacity of 21 gigawatts (GW) but a development pipeline of 27 GW. With that monstrous pipeline, Brookfield Renewable has almost locked in surefire growth as it sells most of its power under long-term, fixed price contracts which generate steady cash flows and supports dividend increases. 

BEP Chart

So far, Brookfield has increased its dividend every year since 2012, growing it a compound annual rate of 6% over the period backed by 10% growth in funds from operations, or FFO per share. Consider this: Management is targeting FFO growth of 6%-11% through 2025, with the potential to grow FFO by another 9% above that target range through acquisitions.

If it hit the bull's-eye, shareholders in Brookfield Renewable could see hefty dividend increases in the coming years, driving the price of this top-notch renewable energy growth stock higher.