As oil prices remain volatile around the latest OPEC+ moves and ongoing demand concerns, all eyes are on the energy sector, especially as investors consider President-elect Trump’s energy policies. While deregulation could favor the energy sector, increased domestic production could also push oil prices lower.

Investors might see this as an ideal entry point into dividend-rich energy stocks with significant domestic exposure, particularly reliable picks like Energy Transfer LP (ET) and ConocoPhillips (COP) that could benefit from potential policy shifts. ET offers robust pipeline infrastructure to insulate against commodity price volatility, while COP’s assets in Alaska could benefit from a broad deregulatory push.

With income stability and high yields in their corner, these dividend stocks promise an intriguing blend of growth and resilience. Let’s dig deeper. 

Energy Dividend Stock #1: Energy Transfer

Dallas-headquartered Energy Transfer LP (ET), with a market cap of $58.5 billion, is an energy giant moving and storing natural gas (NGZ24), natural gas liquids (NGLs), and crude oil (CLZ24). What sets the midstream company apart is its focus on fee-based earnings, locking in long-term contracts that provide relative stability in cash flows, even during periods of heightened commodity price volatility. 

ET stock surged to a 52-week high of $17.71 on Nov. 7, and is up 24.3% on a year-to-date basis.

ET is currently priced at 12 times forward earnings and 0.67 times sales, trading a discount to its oil and gas pipeline peers, such as Kinder Morgan (KMI).

Energy Transfer’s Dividend History

Energy Transfer has consistently demonstrated its commitment to delivering value to shareholders, boasting an impressive 18 consecutive years of dividend payments. On Oct. 28, the company declared a quarterly dividend of $0.3225 per share, a slight uptick from the previous quarter’s $0.32 per share, with the payout scheduled for Nov. 19.

The midstream giant offers an annualized dividend of $1.29 per share, translating to a yield of 7.54% - far outpacing the S&P 500's (SPY) dividend yield of 1.17%. For investors hunting for a reliable high-yield stock with room for growth, Energy Transfer stands out in the energy sector.

Energy Transfer reported its fiscal Q3 earnings results after the close on Nov. 6. Revenue edged up slightly year over year to $20.77 billion, with EPS soaring 113.3% to $0.32 - right in line with analysts’ expectations.

Driving this growth are strategic acquisitions like WTG Midstream, as well as last year’s $7.1 billion merger with Crestwood Equity Partners. Crude oil transport surged 25%, exports soared 49%, and natural gas liquids production climbed 26%, fueling an 11.8% rise in quarterly EBITDA to nearly $4 billion.

What's Next for ET Stock

Looking ahead, ET is securing future growth with a robust pipeline of expansion projects spanning pipelines, exports, and natural gas capacity, some set to deliver value through 2026. Proposed developments, including the Lake Charles LNG terminal, also highlight ET’s commitment to long-term expansion.

The company distributed $1.1 billion to unitholders in Q3, achieving a distribution coverage ratio of 1.8 times. Even after this payout, ET had $890 million in excess cash, with $724 million channeled into growth projects. With ample cash flow and a covered distribution yield, ET combines growth potential with financial stability

Energy Transfer is projecting full-year EBITDA between $15.3 billion and $15.5 billion, up from its initial target. While Q4 might bring extra gains from optimization and natural gas spreads, the company remains cautious on spread forecasts for now.

Management scaled back its growth capital expenditures for the year, now estimated to be about $2.9 billion, down from its earlier forecast. Looking forward, the company envisions a growth capital run rate of $2.5 billion to $3.5 billion annually, up from a previous $2 billion to $3 billion range.

With demand for natural gas skyrocketing, especially from artificial intelligence (AI) and data centers, Energy Transfer is one of the few companies primed to meet these growing power needs. Its extensive pipeline network has already attracted connection requests from around 45 power plants in 11 states and over 40 potential data centers in 10 states.

Co-CEO Marshall McCrea sees potential regulatory relief under the Trump administration as “a breath of fresh air” for the oil and gas industry, especially for advancing LNG export projects. This political shift could help the company tap into more export opportunities in the future.

Analysts predict Energy Transfer’s EPS will rise 23% year over year to $1.34 in fiscal 2024, with the bottom line projected to surge another 10.5% to $1.48 per share in fiscal 2025.

ET has a consensus “Strong Buy” rating overall. Out of the 13 analysts covering the stock, 11 suggest a “Strong Buy,” one recommends a “Moderate Buy,” and one analyst maintains a “Hold” rating.

The mean price target of $19.92 suggests that ET stock has an upside potential of 16.1% from the current price. 

Energy Dividend Stock #2: ConocoPhillips

Houston-based ConocoPhillips (COP), founded in 1875, is a powerhouse in oil and natural gas exploration. With operations across North America, Asia, Australia, and Europe, it navigates both conventional and unconventional plays.

ConocoPhillips specializes in low-risk, cost-efficient operations and holds valuable assets in Canada’s oil sands and global LNG projects. This upstream energy giant’s reach and resources position it as a leader in powering global energy needs. Its market cap currently stands at $128.6 billion.

COP stock is down 3.1% over the past 52 weeks, and set its 52-week lows of $101.29 as recently as mid-September. But after a strong Q3 earnings report on Oct. 31, COP rallied with a 6.4% single-day surge - its biggest gain this year - hinting that this energy giant’s decline may have found bottom.

Priced at 5.71 times forward EV/EBITDA and 6.52 times cash flow, COP looks reasonably valued at current levels.

COP’s Commitment To Shareholders

ConocoPhillips last month announced a dividend of $0.78 per share - a whopping 34% annual increase, which included a $0.28 variable dividend. With a forward yield of 3.15%, COP is aiming for a spot among the top 25% of dividend growers in the S&P 500, powered by strategic moves like its $22.5 billion acquisition of Marathon Oil.

Along with dividends, ConocoPhillips has been aggressively buying back shares, retiring 14% since acquiring Concho Resources in 2021. Now, with plans to repurchase $20 billion in stock over the next few years, it is positioned to continue increasing dividends, even while reducing its outstanding shares.

ConocoPhillips Eyes Alaska Assets

On Oct. 31, the company released its fiscal Q3 earnings results, reporting a revenue of $13.6 billion and generating an EPS of $1.78, beating the bottom-line projections by 6%.

Despite a significant 85,000 barrels per day hit from turnarounds, including Surmont’s five-year maintenance, the company reported3% growth in output, hitting 1.9 million barrels of oil equivalent daily (MMBOED). The Lower 48 region stood out with a record 1.15 MMBOED, up 6% year-over-year.

Breaking it down by basin, the Permian led with 781,000 barrels, followed by Eagle Ford at 246,000 and Bakken at 107,000. Capital expenditures hit $2.9 billion, while the company returned $2.1 billion to shareholders, including $1.2 billion in buybacks. 

Moreover, with $17.4 billion in assets in Alaska, COP is positioning itself for significant expansion. It is set to acquire additional interests in the Kuparuk River and Prudhoe Bay units for $300 million, expected to close by year-end. With the Biden administration slowing resource projects, Trump’s second term could provide a major opportunity for ConocoPhillips.

Trump’s past push for opening the Arctic National Wildlife Refuge and advancing oil leases aligns with ConocoPhillips’ goals, particularly with the Willow project. Trump’s focus on infrastructure, including the Ambler road and Alaska’s gas pipeline, could reignite ConocoPhillips’ growth in the region, accelerating development and boosting the company’s Alaskan assets.

Looking ahead, Conoco is keeping its foot on the gas, with Q4 production forecasted between 1.99 and 2.03 MMBOED, and full-year production now projected to be between 1.94 and 1.95 MMBOED, up from earlier guidance. 

Additionally, the company plans nearly $2 billion in Q4 buybacks and remains on track to return $9 billion to shareholders in 2024, including enhanced dividends.

Analysts expect the company’s profit to be $7.80 per share in fiscal 2024 and then jump by 6.7% to $8.32 per share in fiscal 2025.

Earlier this month, Susquehanna analyst Biju Perincheril raised COP’s price target to $148 from $144 and gave a "Positive" rating, citing strong Q3 results. COP has a consensus “Strong Buy” rating overall among the 24 analysts covering the stock.

The mean price target of $133.69 suggests 18.4% upside potential from the current levels.