The S&P 500 index is offering a paltry dividend yield of just 1.3%, which is troublingly low by any stretch of the imagination. TotalEnergies (TTE 0.48%) is sporting a yield of 6.2%, which is far more appealing. Here's why you should consider jumping on this dividend payer; trust is a big piece of the equation.

A terrible year

TotalEnergies is one of a handful of global energy giants with businesses that span the entire spectrum of the industry, from the upstream sector (drilling) through the midstream space (pipelines and storage) and all the way to the downstream segment (chemicals and refining). The basic idea is that the whole portfolio of assets will help to smooth out the inherent ups and downs of the highly cyclical energy industry. For example, refineries tend to benefit when oil prices fall, something that would hurt TotalEnergies' exploration and production segment. This big-picture game plan normally works out fairly well, but not so much in 2020.

The words safety first with a person giving a thumbs-up sign in the background.

Image source: Getty Images.

The coronavirus pandemic that spread globally in 2020 was an unusual event in that the effort to slow it down involved shutting down massive swaths of the world's economy. Nonessential businesses were shut down, people were told to work from home, and social distancing became a thing. Demand for oil and natural gas, and the products into which they get turned, fell as a result. Energy companies like TotalEnergies suffered mightily. On top of this, the effort to move away from carbon-based fuels picked up steam, putting pressure on the basic business model that integrated energy companies had used for decades.

In fact, peers BP and Royal Dutch Shell both cut their dividends in 2020 as they announced plans to shift toward a cleaner future. ExxonMobil and Chevron have stuck close to their oil core so far, and held the line on or increased their dividends. However, they generally talked about the importance of the payment during the darkest days of 2020. TotalEnergies, meanwhile, announced plans to shift toward a cleaner future, held the line on its dividend, and -- this is the big one -- repeatedly assured investors that its dividend was safe as long as oil averaged around $40 a barrel. 

More than just a promise

A company's dividend exists at the discretion of the board of directors, so don't underestimate how important, and reassuring, it is to hear a board make that kind of commitment. That's particularly true when a company in a cyclical business is suffering through an industry downturn. TotalEnergies proved that dividend investors can trust it to put their interests front and center. With oil roughly twice that low-end $40 per-barrel figure today, the company is paying down debt, buying back shares, and talking about the potential for dividend increases. 

TTE Dividend Yield Chart

TTE Dividend Yield data by YCharts

But don't forget about the big-picture threat from the shift toward cleaner energy sources. Exxon and Chevron, which continued to support their dividends, are basically dragging their feet on this front. That has them in the crosshairs of ESG investors and makes the long-term outlook for their stocks a bit hazy. TotalEnergies is treading a very different path, with plans to triple the size of its "electrons" business by 2030. Notably, this isn't a new venture. The company has been investing in low-carbon alternatives for many years. 

Essentially, TotalEnergies vocally stood by its dividend during very dark days and is looking to ensure that it can stand by the payout in a future that's likely to be driven by clean energy and not oil. That's a great plan, and suggests that TotalEnergies is a high-yield dividend stock worthy of your trust.

Time to jump aboard

A lot has changed in the oil patch over the past year, as demand has increased along with global economic activity. So all of the energy majors are in much better shape today than they were in 2020. However, TotalEnergies is offering the highest yield of any of the oil majors. Add the dividend pledge it made when the chips were down and its future clean energy plans to the mix, and you start to see the attractiveness of the company's shares for dividend investors looking for some energy exposure. All in, TotalEnergies offers a very attractive package today even for more conservative investors.