Three dividend-paying energy stocks with more than 20% upside potential, according to analysts

Three dividend-paying energy stocks with more than 20% upside potential, according to analysts

Three dividend-paying energy stocks with more than 20% upside potential, according to analysts

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The energy sector has delivered a remarkable performance in recent years, driven by rising demand, supply constraints and a global focus on energy security. For investors looking for a combination of income and growth potential, there are three energy stocks – Chevron Corporation (NYSE:CVX), Exxon Mobil Corporation (NYSE:XOM), and NextEra Energy, Inc. (NYSE:NO) – have caught the attention of analysts, who see significant upside potential in these dividend-paying giants.

Chevron Corporation

Chevron, one of the world's largest integrated energy companies, has been in a slump lately, with analysts becoming increasingly bullish on the stock. Mizuho recently maintained a Buy rating on Chevron and raised its price target from $200 to $205, implying a significant upside of 27.41% from the current price of $160.90. This sentiment is echoed by other prominent analysts, with Truist Securities and HSBC setting price targets of $170 and $174 respectively, resulting in an average price target of $183, suggesting a potential upside of 12%.

Chevron's strong performance can be attributed to its robust operating and financial results. In its latest earnings release, the company reported a 12% increase in global production and returned $6 billion in cash to shareholders. With 36 consecutive years of dividend growth and a current forward dividend yield of 3.99%, Chevron offers investors an attractive combination of income and growth potential.

ExxonMobil Corporation

Exxon Mobil, another energy giant, is also gaining ground among analysts. Morgan Stanley recently reinstated coverage on the stock with an Overweight rating and a $145 price target, indicating a potential upside of 24.62% from the current price of $116.35. Mizuho and UBS have also expressed optimism, with an average price target of $141.67 between the three companies, suggesting a potential upside of 20.22%.

Exxon Mobil's strong results in the first quarter of 2024, with earnings of $8.2 billion and cash flow from operations of $14.7 billion, underscore the company's ability to generate significant value for shareholders. The company's commitment to shareholder returns is evident from its 25-year history of dividend growth, with a current forward dividend yield of 3.23%.

NextEra Energy, Inc.

NextEra Energy, a leading clean energy company, has also caught the attention of analysts. Wells Fargo recently maintained an Overweight rating on the stock and raised its price target from $85 to $95, indicating a potential upside of 23.81% from the current price of $76.73. BMO Capital has also expressed confidence in NextEra Energy, with an average price target of $81.67 between the three most recent analyst ratings, indicating a potential upside of 6.12%.

NextEra Energy's strong results for the first quarter of 2024, with adjusted earnings per share growing approximately 8.3% year-over-year, highlight the company's ability to deliver solid financial and operational performance. With 28 consecutive years of dividend growth and a current forward dividend yield of 2.73%, NextEra Energy offers investors the opportunity to participate in the growing clean energy sector while enjoying a steady income stream.

Should You Buy These Dividend-Paying Energy Stocks?

While the strong performance and attractive dividend yields present attractive opportunities for these three energy stocks, experienced investors understand the importance of diversification across asset classes. Private market investments, such as real estate and private credit, can offer unique benefits and potentially higher returns compared to traditional equities.

By allocating a portion of your portfolio to private market investments, you may be able to improve your overall risk-adjusted returns and reduce volatility. These alternative investments often have a low correlation with the stock market, which protects them against market fluctuations. In addition, private market investments can provide access to unique opportunities not available in public markets.

Check out some of Benzinga's top picks for private market opportunities available now:

Integris Secured Credit Fund IV

The fund offers a fixed annual return of 12%, payable quarterly, over a two-year period beginning in April 2024 and ending in April 2026. The note is collateralized with an estimated value of $71 million, with an expected loan- to-value-value. ratio of 14%.

Austin City Fund

Invest in the future growth of Austin's real estate market through an innovative equity investment product. Austin Cityfund assets are already up 10.90% since July, delivering strong returns for investors.

View more private market listings at Benzinga's alternative investment screener.

This article Three dividend-paying energy stocks with more than 20% upside potential, according to analysts originally appeared on Benzinga.com

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