Power Surge: 3 Dividend Energy Stocks Fueling Up for a Bullish Run

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  • These three companies offer some of the most attractive dividend yields in the industry.
  • Western Midstream Partners LP (WES): Its strong growth prospects put it as one of the best energy companies to look out for.
  • MPLX (MPLX): Its strong financials ensure that shareholders always get a piece of the pie.
  • Alliance Resource Partners (ARLP): Its increase in dividend makes it one of the most attractive companies to hold long-term. 
dividend energy stocks - Power Surge: 3 Dividend Energy Stocks Fueling Up for a Bullish Run

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Are you looking to beef up your portfolio with predictable income for your retirement? Then, you should start looking into dividend stocks in the energy sector. Dividend stocks provide investors the advantage of having two potential returns—cash dividends and potential growth. The sector comprises companies catering to natural gas, oil and renewable energy markets. Many companies in these sectors offer some of the most attractive dividend yields. 

Their dividends have become appealing for long-term investors due to the steady cash flow benefit and the energy industry’s cyclical nature that can potentially lead to capital appreciation over time. Furthermore, as the demand for energy and energy-related commodities remains high, these companies are well-positioned to weather fluctuations in the economy. So, if you are in the market for stocks with high dividends, these three dividend energy stocks offer the best income potential for you.

Western Midstream Partners (WES)

TELL stock: a row of natural gas tanks pictured in the evening. Natural gas stocks
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Western Midstream Partners (NYSE:WES) is a midstream assets company that processes natural gas, natural gas liquids (NGLs) and crude oil. Its assets are in Texas, Pennsylvania, New Mexico, Colorado, Utah and Wyoming. In addition to its commodity processing capability, Western Midstream Partners is also involved in buying and selling natural gas, NGLs and condensates as part of its operations or under specific customer contracts. The company currently offers a dividend yield of 8.36%

WES reported a solid financial quarter, with base distribution growing by 2.2% and beating analyst earnings estimates. The company also reported a positive net income and cash flow, proving it can support its dividend payments. Furthermore, Western also reported a record throughput in several of its operational segments, highlighting a solid potential for growth.

Right after the quarter results, the company reached an agreement with a customer to expand its acreage in the Delaware Basin to approximately 40,000 acres and extend the initial term through 2035. This is predicted to help drive long-term growth commitments to its shareholders. These details and attractive dividends make it a strong contender in our dividend energy stocks list. 

MPLX (MPLX)

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The second stock in our list is a diversified master limited partnership (MLP) that operates logistics assets, fuel distributions and midstream energy infrastructures. MPLX LP (NYSE:MPLX) gathers and distributes crude oil, hydrocarbon-based and refined products as part of its Logistics and Storage segment. The company also has a separate segment dedicated to natural gas and the gathering, processing, storage and fractionation of NGLs under its Gathering and Processing Segment. The company is currently offering a solid 9.63% dividend yield.

MPLX reported $918 million in net income attributable to the company. The company also grew its adjusted EBITDA thanks to the contributions of its Logistics and Storage (L&S). MPLX also generated substantial net cash from its operations to help with distributable cash flow and increased quarterly distributions by 10%, making it even more attractive to income investors. The company has distributed $799 million to its unitholders in the quarter as part of its commitment to providing attractive returns to investors. Its solid financials and growing dividends make it another attractive prospect for investors looking for dividend energy stocks to buy. 

Alliance Resource Partners (ARLP)

A magnifying glass zooms in on the logo for Alliance Resource Partners, L.P. (ARLP)
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The last stock on our list is Alliance Resource Partners (NASDAQ:ARLP), which specializes in coal and other natural resources. The company has segments of operation that include Oil, Gas and Coal royalties that control interest in mining reserves and equity interests in assets that the company owns and leases. ARLP also owns other mining complexes under its various diversified segments. The company is committed to sustainability and is driven to reduce its operations’ impact on the environment and currently pays a whopping 12.74% dividend yield.

ARLP reported an 8.3% year-over-year increase in coal sales price realizations and oil and gas royalty volume up by 28.2% YoY. The company has also completed two strategic ventures with Ascend Elements and Infinitum worth $50 million to boost the company’s use of funds further, generate more meaningful risk-adjusted returns, and maximize excess cash flow.  Additionally, ARLP announced the final dividend for the year, $0.70, which brings the annual total to $2.80, a $1.30 increase from last year. Strategic investments, strong management guidelines and an attractive dividend yield put ARLP at the top of our list of dividend energy stocks.

On the date of publication, Rick Orford did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Rick Orford is a Wall Street Journal best-selling author, investor, influencer, and mentor. His work has appeared in the most authoritative publications, including Good Morning America, Washington Post, Yahoo Finance, MSN, Business Insider, NBC, FOX, CBS, and ABC News.


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