Buy these 4 high-yielding dividend stocks today and sleep well for a decade

Everyone loves a stock that pays a huge dividend, but finding one you can trust isn’t always easy. After all, what good is a high dividend yield if the company cuts the payout?

Fortunately, there is hope. The energy industry can be a great place to look for high dividend stocks. Energy is the foundation of society; it’s everywhere, whether it’s used for transport, heating our homes or making the goods and services we buy.

After some digging, we’ve found a handful of high-yielding energy stocks that you can trust to continue to deliver hefty dividends to your portfolio.

1. A diversified energy giant in Canada

Dividend yield: 6.6%

Enbridge (ENB -1.30%) is a North American energy company. Its pipelines carry oil and natural gas across the continent, including 20 percent of America’s natural gas consumption. In addition, it operates the largest gas company in North America. Those two businesses generate the bulk of Enbridge’s profits, although the company also dabbles in renewable energy generation, which could be a long-term growth opportunity.

Enbridge enjoys very steady revenues from its core pipeline and utilities businesses. Not only do people always need energy, but these two industries are also heavily regulated, which helps limit competition.

Slow and steady business performance is fertile ground for dividends; Enbridge has paid and increased dividends for 28 consecutive years. So investors get a high initial return and the payout increases as well. Enbridge expects to earn about C$5.60 per share in distributable cash earnings in 2024, while paying C$3.66. That’s a healthy dividend payout ratio of 65%, leaving some room for future growth and a safety net in case the business stumbles.

2. A long-standing oil major

Dividend yield: 4.6%

Chevron (CVX -1.48%) is an integrated oil and gas company with upstream and downstream operations. This means that Chevron explores and drills for fossil fuels, refines them and sells them on the market.

The company dates back to the 1800s as Pacific Coast Oil. Since the oil and gas industry dates back to the Industrial Revolution, it should come as no surprise that such a storied company also has a dividend history. Chevron has paid and increased dividends for 37 consecutive years, proving it can pay its investors through the ups and downs of the oil and gas industry.

Dividends remain in excellent health today; the current payout ratio is 55% based on Chevron’s estimated earnings for 2024. The company’s strong balance sheet, rated AA-, is a safety net for tough times. Chevron’s footprint in the resource-rich Permian Basin sets the business up for long-term growth.

The company is also looking to acquire Hess for its coveted assets in Guyana, however ExxonMobil opposed the settlement in court. Investors will have to wait and see how the Hess situation plays out, but Chevron should remain a reliable, high-yielding dividend stock regardless of whether the Hess deal closes.

3. Dividends on the back of artificial intelligence

Dividend yield: 4.7%

Dominion Energy (D 0.59%) is a leading gas and electric utility company in the United States, serving more than 4.5 million customers in Virginia, North and South Carolina, Utah, Idaho, Wyoming, West Virginia, Ohio, Pennsylvania and Georgia.

Dominion has had trouble paying its dividends, unlike the other companies on this list. The company cut its dividend at the end of 2020 and not the highest since early 2022. So how did it make this list?

Utilities grow when customers need more power. The Virginia market is high-tech and includes a massive and growing data center footprint. Dominion is poised to grow due to increased demand for electricity.

Analysts expect Dominion to earn $2.77 per share this year, which is not good given its dividend yield of $2.67. It’s almost all of his earnings going out the door. However, earnings estimates for next year are $3.39 per share, so the payout ratio should improve considerably over the next 12 to 18 months.

4. A healthier and improved pipeline stock

Dividend yield: 5.4%

Kinder Morgan (KMI) is a pipeline company that transports oil and gas, CO2 and other resources across North America.

The company cut its dividend to protect its balance sheet in 2015, but has increased it over the past seven years and more. A discount from the past may be a deal-breaker for some investors, but it might be worth putting some faith in Kinder Morgan.

The company has reduced its leverage by 26% since 2016 and today has an investment grade credit rating. Kinder Morgan is proposing distributable cash flow of $2.26 this year versus a dividend of $1.15. That’s a payout ratio of just over 50%. Dividends should remain reliable as long as the company remains financially sound.

Kinder Morgan is more exposed to natural gas today than it was a decade ago, positioning the company for growth. Management sees US natural gas demand growing 19% through 2030, including a significant increase in exports through Mexico (Kinder Morgan is based in Houston, Texas). Investors should see reliable dividends from Kinder Morgan for the foreseeable future.