Energy’s Hottest Trade: 6 High-Yielding Integrateds and Midstream Giants Are All Strong Buys

The post Energy’s Hottest Trade: 6 High-Yielding Integrateds and Midstream Giants Are All Strong Buys appeared first on 24/7 Wall St..

While the hopes for a permanent cease-fire and a cessation of hostilities are the ultimate end-game plan for Iran and the Middle East, the reality is that while spot prices have plummeted to the lowest level since March, there will be an incredible amount of work and resources to put the supply chain and the storage market back to pre-war levels. Given those challenges, many on Wall Street expect energy complex pricing to be higher than they had projected. In fact, before the war with Iran, estimates for Brent crude ranged from $50 to $60 for 2026; now those numbers are anywhere from $60 to $80 for 2026, and about the same for 2027, depending on which bank you put your chips on. The reality is that energy, which has outperformed recently, may continue that streak for the rest of this year and into 2027.

We read an interesting piece from Morning Bullets, which noted that while oil closed the week lower, with WTI under pressure, you shouldn’t let that headline drop mislead you. A busier Strait of Hormuz, layered with shifting restrictions and rising tensions, is precisely the kind of setup where one unexpected incident can rapidly escalate into a full-blown pricing shock. Delays compound, insurance costs surge, tankers reroute, and suddenly the market is scrambling for immediate barrels. This dynamic also explains why energy equities often decouple from crude prices. The sector isn’t just trading the spot or front-month contract; it’s pricing the full distribution of potential outcomes. When tail risks increase, high-quality producers and midstream assets with strong, resilient cash flows can attract aggressive buying, even as futures drift sideways or lower.

We decided to screen our 24/7 Wall St. energy stock database, looking for companies that still deliver large and dependable dividends while remaining good investments on a valuation basis. We remain quite positive on the mega-cap integrated giants; they have had spectacular runs, but all have pulled back sharply from the late March highs and are offering tremendous entry points and dividend yields.

Six companies that offer shareholders some of the best valuations currently are at the top of our strong buy list for investors. All still offer outstanding upside potential to the posted Wall Street target prices. All six are also rated Buy at the top Wall Street firms we cover at 24/7 Wall St.

Why do we cover the high-yielding energy dividend stocks?

Since 1926, dividends have accounted for approximately 32% of the S&P 500’s total return, while capital appreciation has accounted for 68%. Therefore, sustainable dividend income and the potential for capital appreciation are essential to total return expectations. A study by Hartford Funds, in collaboration with Ned Davis Research, found that dividend stocks delivered an annualized return of 9.18% over the past 50 years (1973 to 2023). Over the same timeline, this was more than double the annualized return for non-payers (3.95%).

Integrated Oil Mega-Caps

Chevron

Chevron (NYSE: CVX) is an American multinational energy company primarily focused on oil and gas. This integrated giant is a safer option for investors looking to position themselves in the energy sector and pays a substantial 3.84% dividend, which was raised by 5% earlier this year. Chevron operates integrated energy and chemicals businesses worldwide through its two segments.

The Upstream segment is involved in the following:

• Exploration, development, production, and transportation of crude oil and natural gas
• Processing, liquefaction, transportation, and regasification associated with liquefied natural gas
• Transportation of crude oil through pipelines, and transportation and storage
• Marketing of natural gas, as well as operating a gas-to-liquids plant

The Downstream segment engages in:

• Refining crude oil into petroleum products
• Marketing crude oil, refined products, and lubricants
• Manufacturing and marketing renewable fuels
• Transporting crude oil and refined products by pipeline, marine vessel, motor equipment, and rail car
• Manufacturing and marketing of commodity petrochemicals, plastics for industrial uses, and fuel and lubricant additives

It also involves cash management, debt financing, insurance operations, real estate, and technology businesses.

Chevron completed its $53 billion acquisition of Hess in July 2025. The merger went forward following a favorable arbitration outcome against Exxon Mobil regarding Hess’s lucrative offshore oil assets in Guyana. The purchase has strengthened an already solid balance sheet and earnings.

Mizuho has an Overweight rating and a price target of $230.

ConocoPhillips

The big always gets bigger, and this company completed a $22.5 billion purchase of Marathon Oil in November of 2024. This deal added high-quality assets, particularly in the Eagle Ford and Bakken shales, to the company’s portfolio. ConocoPhillips (NYSE: COP) is an exploration and production company with a rich dividend yield of 2.77%.

Its Alaska segment primarily explores for, produces, transports, and markets crude oil, natural gas, and NGLs. The Lower 48 segment comprises operations in the 48 contiguous states of the United States and the Gulf of Mexico. Canadian operations consist of the Surmont oil sands development in Alberta, the liquids-rich Montney unconventional play in British Columbia, and commercial operations.

The Europe, Middle East, and North Africa segment consists of operations principally located in:

• The Norwegian sector of the North Sea
• The Norwegian Sea
• Qatar
• Libya
• Equatorial Guinea
• The United Kingdom

The Asia Pacific segment has exploration and production operations in China, Malaysia, and Australia, as well as commercial operations in China, Singapore, and Japan. The Other International segment includes interests in Colombia as well as contingencies associated with prior operations in other countries.

Jefferies has a Buy rating with a $161 target price.

Exxon Mobil

Exxon Mobil (NYSE: XOM) manages an industry-leading portfolio of resources and is one of the world’s largest integrated fuels, lubricants, and chemical companies. The decline in oil prices presents investors with an excellent entry point, and they will likely seize the opportunity to secure a strong 2.87% dividend yield. Exxon is the world’s largest international integrated oil and gas company, exploring for and producing crude oil and natural gas in North and South America, Europe, Africa, Asia, and elsewhere.

Exxon also manufactures and markets commodity petrochemicals, including olefins, aromatics, polyethylene, and polypropylene plastics, as well as specialty products. Additionally, the company transports and sells crude oil, natural gas, and petroleum products.

Top Wall Street analysts expect the company to remain a key beneficiary in a higher oil price environment, and most remain optimistic about the company’s sharp positive inflection in capital allocation strategy. The upstream portfolio offers leverage to a further demand recovery, and Exxon offers greater Downstream/Chemicals exposure than its peers.

Exxon completed its purchase of oil shale giant Pioneer Natural Resources in 2024 in an all-stock transaction valued at $59.5 billion. The deal created the largest U.S. oilfield producer and guarantees a decade of low-cost production.

Barclays has an Overweight rating on the shares, with a $182 target price.

High-Yielding Midstream MLPs

Energy Transfer

Energy Transfer (NYSE: ET) is one of North America’s largest and most diversified midstream energy companies. This top master limited partnership is a safe option for investors seeking energy exposure and income, as the company pays a 7.06% distribution yield. Energy Transfer owns and operates one of the largest and most diversified portfolios of energy assets in the United States, with a strategic footprint across all major domestic production basins.

The company is a publicly traded limited partnership with core operations that include:

• Complementary natural gas midstream, intrastate, and interstate transportation and storage assets
• Crude oil, natural gas liquids (NGL), and refined product transportation and terminalling assets
• NGL fractionation
• Various acquisition and marketing assets

Following the acquisition of Enable Partners in December 2021, Energy Transfer owns and operates over 114,000 miles of pipelines and related assets in 41 states, spanning all major U.S. producing regions and markets. This further solidifies its leadership position in the midstream sector. Through its ownership of Energy Transfer Operating, formerly known as Energy Transfer Partners, the company also owns Lake Charles LNG; the general partner interests, the incentive distribution rights, and 28.5 million standard units of Sunoco (NYSE: SUN); and the public partner interests and 39.7 million standard units of USA Compression Partners (NYSE: USAC).

Jefferies has a Buy rating on the shares, with a $23 target price.

Enterprise Products Partners

This top midstream giant is an American midstream natural gas and crude oil pipeline company headquartered in Houston, Texas. Enterprise Products Partners (NYSE: EPD) is one of the most extensive publicly traded energy partnerships, paying a reliable 5.88% dividend. The company’s debt-to-EBITDA ratio ranges from 3.1x to 3.4x, which is moderate for a midstream energy company, and its interest coverage ratio is 5x. It generates strong free cash flow, with an operating cash flow of approximately $8.8 billion, resulting in approximately $4.2 billion in free cash flow annually after deducting capital expenditures. Another significant benefit for shareholders is that most of the corporate debt is fixed-rate, thereby limiting the risk of rising interest rates.

Enterprise Products Partners provides various midstream energy services, including:

• Gathering
• Processing
• Transporting and storing natural gas, natural gas liquids (NGL), and fractionation
• Import and export terminalling
• Offshore production platform services

The company has four reportable business segments:

• Natural Gas Pipelines and Services
• NGL Pipelines and Services
• Petrochemical Services
• Crude Oil Pipelines and Services

One reason many analysts like the stock might be its distribution coverage ratio. The company’s coverage ratio is well above 1x, making it relatively less risky among the MLPs.

UBS has a Buy rating with a $45 price objective.

MPLX

MPLX (NYSE: MPLX) is a diversified, large-cap master limited partnership formed by Marathon Petroleum. This company is one of the top holdings in the Alerian MLP Energy Exchange-Traded Fund and pays a healthy 7.46% dividend. The company is primarily engaged in transporting crude oil and refined products, with terminals in the U.S. Midwest and Gulf Coast regions, and in natural gas gathering and processing in the Northeast, following its 2015 acquisition of MarkWest Energy.

The company’s assets include:

• Network of crude oil and refined product pipelines
• Inland marine business
• Light-product terminals
• Storage caverns
• Refinery tanks
• Docks
• Loading racks and associated piping
• Crude and light-product marine terminals

MPLX also owns:

• Crude oil and natural gas gathering systems
• Pipelines, natural gas, and NGL processing and fractionation facilities in key U.S. supply basins

Wells Fargo has a $61 target price to accompany its Overweight rating.

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