Three Energy Stocks Positioned for Strong Dividend Growth and Returns

The energy sector has underperformed lately, with S&P 500 energy stocks gaining only 4% year-to-date versus the broader market’s 18% surge. Yet demand for energy remains robust, and the best oil stocks to buy today are those with clear visibility on future cash generation and dividend expansion. Here are three standout energy companies worth considering.

The Cash Flow Story: ConocoPhillips

ConocoPhillips stands out as a producer with fortress-like fundamentals. The company maintains some of the sector’s lowest operating costs and can sustain operations at mid-$40s oil prices. With crude trading in the low $60s, it’s running at comfortable surplus cash flow levels.

The real catalyst lies ahead. By 2029, ConocoPhillips projects an incremental $6 billion in annual free cash flow from three large LNG projects and its Willow Alaska development—a significant jump from the $6.1 billion generated in the first nine months of 2024. This expanding cash flow translates directly to dividend power. The company recently raised payouts by 8% and targets top-10% dividend growth within the S&P 500 going forward, backed by ongoing share repurchases.

The Acquisition Playbook: Oneok

Oneok offers a different energy play through midstream infrastructure. The pipeline operator generates stable cash backed by long-term contracts and regulated rates, supporting a 5.6% dividend yield.

What distinguishes this company is its strategic acquisitions strategy. After integrating Magellan Midstream Partners in 2023, Oneok acquired Medallion Midstream and EnLink positions in successive deals totaling roughly $10 billion. Management expects hundreds of millions in synergies plus earnings from organic projects like the Texas City Logistics Export Terminal and Eiger Express Pipeline, both expected online by mid-2028. This growth engine should support 3-4% annual dividend increases.

The Earnings Ascent: NextEra Energy

NextEra Energy presents a utility-focused angle with superior growth. Its Florida operations invest over $100 billion through 2032 to meet regional power demand. The energy resources division meanwhile builds transmission lines, gas pipelines, and clean power assets under long-term contracts.

The company guides for over 8% compound annual earnings-per-share growth through the next decade—the highest growth rate among these three energy stocks. That supports a 10% dividend increase next year and 6% compound annual growth through 2028, despite a modest 2.8% current yield.

Finding the Best Oil Stocks Today

These three represent different ways to profit from persistent energy demand: pure production leverage (ConocoPhillips), infrastructure consolidation upside (Oneok), and utility-regulated earnings growth (NextEra Energy). Each brings high-yielding dividends supported by visible multi-year growth. Together, they showcase why energy remains compelling for income-focused investors seeking both yield and capital appreciation in the years ahead.