Whether you're looking for some stalwart buys to balance out your portfolio in 2022 or a means of generating extra capital to invest, dividend stocks can help you achieve both of those goals. In this segment of Backstage Pass, recorded on Jan. 26, Fool contributors Rachel Warren and Jason Hall respond to a member's question and discuss two great dividend stocks for investors to consider right now.
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Rachel Warren: We had a few comments from Richard O. He was saying, "Dividends plus ROIC plus the dividend reinvestment plus compounding plus time equals total magic. Always looking for a sale to invest in high-quality companies."
Then he was asking, "Would you rather add to a great bank like Bank of America (BAC -0.21%) or a great energy company like EOG (EOG 0.25%) for the next three years?"
Jason Hall: I'm going to answer this one.
Warren: Go ahead.
Hall: Any independent oil and gas producer like EOG, or Pioneer (PXD -2.28%), or any of those companies, is a leveraged bet on oil prices.
Bank of America, you're going to get a share of their earnings, if they grow their earnings, then five years from now, the stock price should continue to grow. It is a far more stable, very high floor business. Maybe the ceiling might not be as high.
With EOG, it's a great business, and they've got a great business model that does really, really well. But the bottom line is the default prices fall 25%, 30%, 40%, 50%, which is something that's really hard to predict as we've seen with oil prices.
The stock price is going to correlate with oil prices up and down, so you're not betting on EOG the business, you are betting on oil prices moving higher.
That's what you have to accept if you're going to buy any oil and gas stock right now.
