ExxonMobil (NYSE: XOM) and Chevron (NYSE: CVX) are the two largest U.S.-based oil and natural gas companies. However, there are plenty of other dividend-paying energy companies to consider.
Two that stand out today are Equinor (NYSE: EQNR), down 15% year to date, and ConocoPhillips (NYSE: COP), down 3% so far this year. Both companies pay attractive dividends and are worth buying now.
Image source: Getty Images.
Equinor’s outsized profits have been a boon for income investors
ExxonMobil and Chevron have paid and raised their dividends annually for an impressive 42 years and 37 years, respectively.
In contrast, Equinor’s dividend history is a little more complicated. The Norwegian oil and natural gas giant slashed its quarterly dividend from $0.27 per share at the end of 2019 to $0.09 per share at the start of 2020 as the COVID-19 pandemic took a sledgehammer to its cash flow.
However, Equinor cashed in on the oil and gas recovery over the last few years — booking record revenue, net income, and free cash flow in 2022. Equinor’s relatively low capital expenditures and inexpensive cost of production helped amplify its gains. Equinor’s performance dipped in 2023, but its results were still excellent.
EQNR Revenue (Annual) Chart
By late 2021, Equinor had raised its ordinary dividend back up to $0.20 per share, and it had begun to pay “extraordinary” dividends as well that were based on the performance of the company. These extraordinary payouts started at $0.20 per share — lifting Equinor’s total dividend above its pre-pandemic level — and rose as high as $0.70 per share in Q3 2022.
Equinor paid out a whopping $2.90 per share in dividends in 2022, and $3.40 per share in 2023. For 2024, Equinor plans to pay a $0.35 per share ordinary dividend and a $0.35 per share extraordinary dividend each quarter. That would add up to $2.80 per share for the year, giving it a forward yield of 10.5% based on the current stock price of $26.71.
Equinor is a uniquely conservative oil major. It has been careful about ramping up production or making splashy acquisitions in the oil patch…
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