The energy sector is vitally important to the global economy and, because of that, it can move cyclically as the economy moves, which means it can sometimes also be highly volatile. Investors would do well to have at least some exposure to the sector in their portfolio, but they should be very thoughtful about what energy stocks they buy. That's doubly true if they are a dividend lover.
Here's why Chevron (CVX 1.87%), Enterprise Products Partners (EPD +0.35%), and TotalEnergies (TTE 0.02%) are no-brainer picks if an investor wants energy sector exposure but also loves dividends.
1. Chevron is built to survive the cycle
Chevron is an integrated energy company, which means that it has exposure across the entire energy value chain. That includes the upstream (energy production), the midstream (pipelines), and the downstream (chemicals and refining). Each segment of the industry operates a little differently through the energy cycle, which helps to soften the industry's commodity-driven peaks and valleys. It isn't the only integrated energy company, noting that TotalEnergies also uses the integrated model.
Image source: Getty Images.
What sets Chevron apart is its balance sheet, which happens to be among the strongest in the industry. The company has a debt-to-equity ratio of 0.22x, which is low for any company and second only to ExxonMobil (XOM 1.39%) in Chevron's peer group. Having low leverage allows Chevron to take on leverage during energy downturns so it can continue to support its business and dividend until oil prices recover. When commodity prices recover, as they always have historically, debt is reduced. That's how Chevron has managed to increase its dividend annually for 38 consecutive years, second only to ExxonMobil's 43 years.
NYSE: CVX
Key Data Points
You might think ExxonMobil sounds like a better choice, but there's a caveat. While both are clear survivors, ExxonMobil's dividend yield is 3.5% and Chevron's is 4.4%. Either stock would be a solid energy investment, but Chevron is the more attractive dividend stock right now.
2. Enterprise Products Partners sidesteps commodity volatility
If you are a conservative dividend investor and owning a stock that operates in a volatile, commodity-driven business is too much for you, well, you still have a solid energy option at your disposal. Master limited partnership (MLP) Enterprise Products Partners is a North American midstream giant. The energy infrastructure it owns is used to move oil and natural gas around the world. But the big story is that Enterprise is a toll taker, charging fees for the use of its assets. The price of what's flowing through its system is much less important than the demand for energy. Demand tends to remain high regardless of commodity prices.
This model, combined with a conservative approach to the balance sheet, has allowed Enterprise to increase its distribution every year for 27 consecutive years. The distribution yield, meanwhile, is a huge 7% or so. If you are looking to maximize the income you generate, Enterprise is a solid choice.
NYSE: EPD
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But there's an issue you need to think about. The MLP is a slow-moving business, and the yield will likely represent the lion's share of your return over time. If you are a conservative dividend investor, however, that could be seen as a net positive.
3. TotalEnergies is preparing for the future today
There's one other way to play the energy sector that's a bit more aggressive. TotalEnergies is in the process of using oil and gas profits to build a division around renewable power and electricity. This business grew 17% in 2024 and has expanded 3% through the first nine months of 2025. It is, basically, attempting to shift with the world as the world moves from dirtier energy sources to cleaner ones. It is the only integrated energy giant that's made such a commitment and stuck to it. Moreover, it is supporting its dividend through this period.
NYSE: TTE
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Peers BP and Shell both made clean energy commitments and cut their dividends to fund the directional shift. Both companies subsequently walked back their clean energy plans, leaving investors with just the dividend cuts. If you want a clean energy hedge with your oil and gas investment, TotalEnergies stands out as a winner. And it comes with a lofty 6.1% yield (U.S. investors have to pay French taxes on the dividend, some of which can be claimed back at tax time).
Three ways to play energy dividends
There's no perfect answer in the energy patch when it comes to dividend investing. Chevron, Enterprise, and TotalEnergies are all good choices, even though they are each appropriate for a different type of investor. That said, given the importance of energy to the global economy, investors should really consider having some energy exposure. These three high-yield stocks will give you that exposure while also paying you well along the way.
