Top 3 Energy Dividend Stocks for Reliable Income in 2026

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Top 3 Energy Dividend Stocks for Reliable Income in 2026.

investing ideas :: 10hrs ago :: source - motley fool

By Justin Pope

Right now, the energy sector is probably the most complicated area of the stock market for investors. The ongoing war in Iran has disrupted the flow of oil and other materials through the Strait of Hormuz, which around one-fifth of the world's petroleum typically passes through.

The disruption is driving up oil and gas prices and causing shortages in parts of the world. It's an extremely unpredictable situation, and things can change at the drop of a hat.

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Those looking for reliable investment income in 2026 should home in on these three energy stocks. Whether it's their diverse assets or fee-based revenue streams, these stocks should continue to produce income for investors, regardless of what happens next in the Middle East.

Image source: The Motley Fool.

Going for sky-high yield with Energy Transfer

Energy Transfer (NYSE: ET) is one of the largest U.S. midstream companies, with pipelines and storage facilities spanning more than 140,000 miles that transport oil and gas products from production wells to refineries and ports for export. It generates approximately 90% of its earnings before interest, taxes, depreciation, and amortization (EBITDA) via fees, so it has little direct sensitivity to commodity prices.

As a master limited partnership (MLP), Energy Transfer passes its profits and losses through to unitholders. It enables the business to pay large distributions, but the IRS will send you a special tax form, a K-1, instead of a 1099 when you file your taxes. Energy Transfer currently yields 6.8%, and the distributable cash the business generated in 2025 was 1.8 times its paid distributions.

Additionally, Energy Transfer has several expansion projects in the Permian Basin in the works and in its backlog, as well as contracts to supply Oracle's data centers with natural gas. Management is projecting adjusted EBITDA to grow by 9% to 12% this year, which should easily fund future distributions.

The ultra-dependable blue chip oil major

ExxonMobil (NYSE: XOM) is the largest publicly traded oil and gas company, producing 4.7 million barrels of oil and gas equivalent per day in 2025. It's an integrated oil major, meaning it operates upstream and downstream business segments. Its exploration (upstream) business is sensitive to commodity prices, but its refining and retail (downstream) businesses help soften the effect of industry downturns when prices collapse.

The stock's yield is modest at 2.4%, but it is backed by ExxonMobil's massive balance sheet and diverse operations, which anchor one of the energy sector's most consistent dividends. ExxonMobil has paid and raised its dividend for 43 consecutive years, a streak that's endured multiple recessions, wars, and a global pandemic.

ExxonMobil expects to generate $145 billion in surplus cash flow by 2030, driven by increased production from strategic assets, such as the Permian Basin, and by cost synergies from its merger with Pioneer Natural Resources. ExxonMobil could generate even more cash if oil prices stay high for an extended time, so there's no reason to doubt the dividend right now.

A dependable 5.9% yield from this midstream giant

Enterprise Products Partners (NYSE: EPD) is a renowned midstream company in North America. Its infrastructure includes over 50,000 miles of pipelines, hundreds of storage facilities, petrochemical facilities, and deepwater docks. Like Energy Transfer, Enterprise Products Partners operates as a master limited partnership, so it has the same structure and tax implications.

The distribution yield is currently 5.9%, so it's another high-yielder that should appeal to income-hungry investors. The company's 27 consecutive annual distribution increases illustrate management's ability to guide the company through the industry's boom-and-bust cycles. Enterprise Products Partners also generated enough distributable cash in 2025 to cover the payout by 1.7 times.

Enterprise Products Partners has approximately $4.8 billion in capital projects underway, primarily aimed at expanding its operations to meet soaring demand for U.S. gas exports. Management expects adjusted EBITDA to grow by 3% to 5% this year, then accelerate to about 10% in 2027. That all but ensures that Enterprise Products Partners will increase its distribution, not just maintain it.

Should you buy stock in Energy Transfer right now?

Before you buy stock in Energy Transfer, consider this:

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Justin Pope has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Oracle. The Motley Fool recommends Enterprise Products Partners. The Motley Fool has a disclosure policy.

This article was originally published by The Motley Fool