Income Investors: 3 Energy Stocks That Yield up to 6%

Income investors looking to combat volatility may want to target top dividend-yielding energy stocks like Enbridge Inc. (TSX:ENB)(NYSE:ENB).

| More on:
Canadian energy stocks are rising with oil prices
You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn more

The S&P/TSX Composite Index delivered is third-consecutive triple-digit gain on Tuesday, May 17. It moved up 286 points with sectors like base metals, health care, and information technology leading the way. Meanwhile, the S&P Capped Energy Index rose 1.53% on the same day. Despite this increase, Canadians should be cautious in this volatile market. That is why I’m going to approach this article from the perspective of an income investor. Below are three energy stocks that have thrived in the oil and gas bull market and offer nice dividends.

This energy stock has been dependable in all areas over the past year

Gibson Energy (TSX:GEI) is a Calgary-based liquids infrastructure company that is engaged in the gathering, storage, optimization, processing, and marketing of liquids and refined products in North America. Shares of this energy stock have climbed 13% in 2022 as of close on May 17. The stock is up 9% year over year.

This company released its first-quarter 2022 results on May 2. Revenue increased 67% year over year to $2.68 billion. Meanwhile, adjusted EBITDA increased 17% from the previous year to $121 million. Gibson benefited from higher commodity prices in 2022 and increased volumes.

Shares of this energy stock possess a solid price-to-earnings (P/E) ratio of 23. It approved a 6% increase to its quarterly dividend to $0.37 per common share. That represents a strong 5.7% yield. This should pique the interest of income investors right now.

Income investors should be no stranger to Enbridge

Enbridge (TSX:ENB)(NYSE:ENB) is a Canadian energy infrastructure heavyweight that should require no introduction for income investors. It boasts a massive project pipeline, and it has deliver a quarter-century of dividend growth. These are some of the reasons I’d suggested that this energy stock is worth holding onto for the long term back in November 2020. Its shares have climbed 16% in the year-to-date period.

Investors got to see the company’s first-quarter 2022 earnings on May 6. It delivered adjusted earnings of $1.7 billion, or $0.84 per common share — up from $1.6 billion, or $0.81 per common share, in the previous year. Meanwhile, distributable cash flow rose to $3.1 billion, or $1.52 per common share, compared to $2.8 billion, or $1.37 per common share, in the first quarter of 2021.

This energy stock last had a favourable P/E ratio of 19. Enbridge offers a quarterly dividend of $0.86 per share, which represents a 6% yield.

Here’s another top energy stock for income investors to snatch up today

TC Energy (TSX:TRP)(NYSE:TRP) is the third and final energy stock I’d suggest income investors snatch up today. This Calgary-based company is also engaged in the energy infrastructure business. Shares of TC Energy are up 22% so far in 2022.

In Q1 2022, this company reported net income of $0.4 billion, or $0.36 per common share — up from a net loss of $1.1 billion, or $1.11 per common share, in the first quarter of 2021. TC Energy has also made promising inroads in the renewable power space with its wind and solar energy projects. This energy stock also possesses a very solid P/E ratio of 22. It last paid out a quarterly dividend of $0.90 per share. That represents a 4.9% yield.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Ambrose O'Callaghan has no position in any of the stocks mentioned. The Motley Fool recommends Enbridge.

More on Energy Stocks

growing plant shoots on stacked coins
Energy Stocks

Buy the Dip? 2 TSX Energy Stocks With Fast-Growing Dividends

TSX energy stocks have seen a double-digit decline in June. Here are two stocks with incredibly fast-growing dividends to consider…

Read more »

Target. Stand out from the crowd
Energy Stocks

3 Oversold TSX Stocks I’d Buy in Bulk

Recession fears impact oil prices, although three oversold stocks should remain resilient and generate substantial free funds flow throughout 2022.

Read more »

Arrow descending on a graph
Energy Stocks

Why Did Oil Stocks Crash so Suddenly?

Oil stocks like Cenovus Energy (TSX:CVE)(NYSE:CVE) crashed dramatically last week. Here's why.

Read more »

Group of industrial workers in a refinery - oil processing equipment and machinery
Energy Stocks

Are Energy Stocks Now Oversold?

Energy stocks look oversold. Is now the best time to buy?

Read more »

Economic Turbulence
Dividend Stocks

Buy the Dip? 2 Stocks That Got Unfairly Punished

Several high-quality Canadian stocks are insanely cheap today. Take a look at two unfairly punished stocks that should warrant a…

Read more »

Man considering whether to sell or buy
Energy Stocks

When to Sell Suncor Energy (TSX:SU) Stock

Suncor Energy (TSX:SU) stock surged significantly in 2022. But the recent 20% dip got investors worried. Here’s when you should…

Read more »

Group of industrial workers in a refinery - oil processing equipment and machinery
Energy Stocks

2 Energy Stocks Fly Higher Amid Recession Fears

Despite growing recession fears, two energy stocks continue to fly high and deliver positive returns to shareholders.

Read more »

oil and natural gas
Energy Stocks

Forget About Oil Prices With This 1 Stock

Looking for the perfect investment that can make you forget about oil prices rising? Here’s one energy stock to buy…

Read more »