The global economy depends on oil and gas, and that's unlikely to change anytime soon. That said, the industry can be volatile. Most oil and gas companies are sensitive to commodity prices, which can fluctuate depending on geopolitical and economic factors.
Investors looking to invest in oil and gas companies should consider companies with proven track records of strong business performance. They often have diversified businesses, enabling them to endure that volatility, and can pay and increase dividends through the industry's cycles.
Here are three oil and gas dividend stocks that investors can depend on for dividend income over the next five years -- and likely beyond.
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1. Chevron
Industry giant Chevron (CVX +3.12%) is an integrated oil major, meaning it operates across upstream and downstream segments of the oil and gas industry. Its massive size and diversified business have directly contributed to the company's ability to raise its dividend for 37 consecutive years. Its current 4% dividend yield is higher than most stocks you'll come across.
NYSE: CVX
Key Data Points
Chevron recently closed a $55 billion blockbuster acquisition of Hess, giving it exposure to the Stabroek Block off Guyana, a cornerstone for future production growth. Management expects to grow free cash flow by 10% annually over the next five years, which should continue to fund dividend increases.
2. Enterprise Products Partners
Midstream companies such as Enterprise Products Partners (EPD 1.45%) store and transport crude oil, natural gas, and other commodities through their extensive pipeline networks. They typically bill customers based on volume, so they aren't as sensitive to market prices. EPD is one of the largest midstream companies in North America, with over 50,000 miles of pipelines.
NYSE: EPD
Key Data Points
It has been an excellent dividend stock, with an ongoing streak of 28 consecutive annual dividend raises. Its structure as a master limited partnership (MLP) requires investors to take some extra steps come tax time, but MLPs also often pay larger dividends. EPD currently yields a whopping 6.6%. Investors can likely continue to count on EPD for income amid growing oil and gas production in the United States.
3. Enbridge
Canadian energy company Enbridge (ENB +0.71%) is about as diversified as you'll find in the energy sector. The company's midstream business helps move resources throughout North America, complemented by a large utility business and renewable energy generation projects. Most of Enbridge's business is regulated, generating steady revenue streams for a dependable dividend.
NYSE: ENB
Key Data Points
Enbridge has increased its dividend for 28 consecutive years, and the stock currently yields a lofty 5.7%. Management anticipates mid-single-digit growth going forward, as new projects start coming online. There's no reason to believe that this proven dividend grower won't continue to deliver for at least the next five years.
