Dividend stocks hold a special place in many investors' portfolios. They have the potential to provide a constant stream of income, without some of the risk that comes with betting big on potential market breakouts. But finding the right stocks isn't always that easy.
In my experience, the primary rules to abide by when investing in dividend stocks are; a history of strong principles, boosting reward distributions gradually, fantastic technicals, and a history of favorable trading activity in the shares.
Dividend-paying stocks from low-risk, premium businesses are a wise method to create a constant and dependable revenue stream.
Many assume dividend stocks are uninteresting, but the reality is quite the contrary. Several stocks with mouthwatering returns were downright amazing in 2019, providing impressive gains, and of course, strong dividends. And 2020 will likely be no different.
Dividend income can be an essential part of a long-term investment strategy, especially for individuals who are wanting to grow their portfolios gradually throughout the years. The energy stocks provided below all meet specific criteria, and are worth considering as the new year kicks off.
BP
As the company with the highest dividend yield on the list at 6.6%, BP is an oil major worth watching in 2020. And while it is heavily dependent on its oil assets, it is also well positioned to ride the renewable energy boom. BP's renewable as well as nonrenewable fuel source future looks brilliant.
Wall Street analysts expect BP's earnings to rise by 21% in 2020. The surge is reasonably attainable with higher oil prices and higher hydrocarbon output. Additionally, BP has a number of upstream projects under development.
ExxonMobil
With dividends paying out roughly 5%, energy giant ExxonMobil is another firm worth watching, especially as geopolitical tensions reach a boiling point. Related: Three Reasons Precious Metals Are On The Rise
Not only does Exxon have a a presence in every sector of the energy industry, it. has global reach which allows it to take advantage of global economic development. And as global energy demand continues to rise, Exxon is poised to rise up to the occasion, offering crude oil, refined products, and even renewables on a significant scale.
According to the company, 550 billion barrels of oil and over 2,100 trillion cubic feet of gas will be needed to meet global demand by 2040. To meet this demand, Exxon is looking to grow its production globally, but specifically in Guyana and the Permian Basin
Chevron
It should come to no surprise to anyone that Chevron’s financial performance is strongly linked to the price of crude oil. While the price of oil struggled somewhat in 2019, 2020 is already shaping up to be an important year for the vital commodity. In fact, oil prices spiked just in the past week following the assassination of Iran’s General Soleimani, and as tensions continue to escalate, many analysts are suggesting prices could climb even higher.
Though the recent geopolitical events have taken the spotlight in oil markets, there are also a number of other factors that are pointing to higher crude prices, from the OPEC+ output cut to the slowdown of U.S. shale growth.
Despite this, however, Chevron is hedging against long-term weakness in oil prices. Its key assets across the globe are likely to boost both oil and gas production in the years to come, cutting back their breakeven costs at the same time.
By Michael Kern via Macro Investing
