Power Your Portfolio: Three Energy Stocks Worth Buying in Today's Market

Why Now Is the Time for Buying Energy Equities

The energy sector has had a quiet run recently. While the broader S&P 500 has climbed approximately 18% so far this year, energy stocks have lagged with only a 4% gain on average. The culprit? Depressed oil prices that have weighed on sector performance. Yet despite this temporary underperformance, the fundamental case for energy investments remains compelling. Demand for energy continues to grow, and the right stocks can deliver substantial shareholder returns through a combination of rising dividends and capital appreciation.

If you’re looking to capitalize on this sector’s long-term tailwinds, here are three energy stocks worth serious consideration.

ConocoPhillips: A Cash Generation Machine

ConocoPhillips (NYSE: COP) stands out as one of the sector’s premier oil and gas producers, backed by one of the industry’s most extensive and diversified asset portfolios. What makes this company particularly attractive is its operational efficiency—it boasts some of the lowest cost structures in the business.

The financial picture is compelling. ConocoPhillips needs only a mid-$40s oil price to fund its capital program and roughly $10 more per barrel to support its dividend payments. With crude currently trading in the low $60s per barrel, the company is generating significant excess cash. The margin provides a substantial cushion against price volatility.

Looking ahead, the company’s breakeven economics will improve markedly. Following last year’s transformational merger with Marathon Oil, ConocoPhillips expects ongoing cost reductions to steadily lower its production floor. More importantly, three massive liquefied natural gas projects and the Willow oil development in Alaska should all reach completion by decade’s end. These initiatives alone will inject an additional $6 billion in annual free cash flow by 2029, assuming a $60 crude price—no small matter for a company that generated $6.1 billion in free cash flow through the first nine months of 2024.

This surging cash generation gives ConocoPhillips ample firepower to reward shareholders. The company sports a 3.4% dividend yield and recently increased its payout by 8%, with ambitions to deliver dividend growth that ranks in the top 10% among S&P 500 companies. Share repurchases round out the capital allocation strategy. Together, rising cash flow and shareholder-friendly returns position this company to generate robust total returns over the coming years.

Oneok: Stable Growth Through Strategic Consolidation

Oneok (NYSE: OKE) operates as one of America’s largest midstream energy companies, a business model that generates exceptionally reliable cash flows. Long-term contracts and government-regulated rate structures underpin these earnings, creating a fortress balance sheet ideal for supporting a high-yielding dividend—currently yielding 5.6%.

The company has executed a masterful strategy of inorganic growth. Its 2023 acquisition of Magellan Midstream Partners marked a transformational move, expanding the company’s reach into crude oil and refined product infrastructure. Last year brought the purchase of Medallion Midstream and a controlling stake in EnLink for $5.9 billion, followed by acquisition of the remaining EnLink stake for $4.3 billion earlier this year.

These deals unlock substantial value. Oneok expects to harvest hundreds of millions in cost synergies and operational improvements over the coming years. Beyond M&A, the company has greenlit several organic expansion initiatives. The Texas City Logistics Export Terminal and the Eiger Express Pipeline should both enter service by mid-2028, supporting incremental growth.

With merger synergies flowing and new projects coming online, Oneok is well-positioned to grow its already attractive dividend at a 3-4% annual clip. For income-focused investors, this combination of reliable yield and steady growth offers compelling appeal.

NextEra Energy: Building the Grid of Tomorrow

NextEra Energy (NYSE: NEE) operates as a leading electric utility and energy infrastructure developer with two distinct growth engines. Its Florida-based utility delivers steadily climbing rate-regulated earnings, while its energy resources platform generates growing income backed by long-term contracts and regulated returns.

The company is investing aggressively to meet surging electricity demand. Its Florida utility alone will deploy over $100 billion through 2032 to support the state’s booming energy requirements. Meanwhile, the energy resources segment is deploying billions to construct transmission infrastructure, expand gas pipeline networks, and develop renewable power facilities.

This capital deployment strategy underpins a compelling earnings trajectory. NextEra projects compound annual earnings-per-share growth exceeding 8% over the next decade. This earnings muscle supports a 2.8%-yielding dividend that the company plans to increase by 10% next year, followed by 6% annual growth through at least 2028.

The combination of steady earnings expansion and reliable income growth gives NextEra Energy the ingredients for powerful total returns in the years ahead.

The Case for Buying Energy Stocks Now

These three companies—ConocoPhillips, Oneok, and NextEra Energy—each offer distinct pathways to energy sector exposure with compelling growth prospects. ConocoPhillips provides direct leverage to commodity cycles with strong cash generation, Oneok delivers stable midstream returns with predictable growth, and NextEra Energy offers infrastructure-backed earnings expansion with meaningful dividend upside.

All three are investing heavily in their businesses and returning capital to shareholders through both growing dividends and, in ConocoPhillips’ case, share buybacks. This combination of reinvestment and cash returns should fuel attractive long-term performance. For investors seeking exposure to the energy sector’s structural tailwinds, these three stocks merit serious consideration as core holdings in a diversified portfolio.