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ConocoPhillips (COP), Enterprise Products Partners L.P. (EPD), Linn Energy LLC (LINE): Are These the Three Best Investments in Energy?

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ConocoPhillips (NYSE:COP)Even as the market hits new highs, there are still plenty of good stocks out there to invest in these days. With oil prices still rather elevated and natural gas off its recent lows, energy stocks are a great place to place your hard-earned investing dollars. That’s why the following three companies — which have above-average shareholder payouts, excellent long-term growth prospects, and solid balance sheets — top my list of the best stocks to invest in today.

ConocoPhillips (NYSE:COP)
Among the large independent exploration and production companies, ConocoPhillips (NYSE:COP) has the characteristics I look for in a long-term investment. The company has a steady growth plan, which will see it boost its production and margins by 3%-5% annually through 2017, with multiple opportunities to keep growing beyond that date. In addition to its exceptional growth opportunities here in the states, Conoco’s operations span the globe, including positions in the Canadian oil sands, Australian natural gas exports, and European offshore oil. That diversification has helped keep the company from suffering the fate of many of its landlocked U.S.-based peers.

That’s why, unlike many of those same U.S.-focused independents, ConocoPhillips (NYSE:COP) has an excellent balance sheet, with $5.4 billion in cash. Further, because its operations generate substantial cash flow, it has plenty left over after reinvesting in its growth opportunities to still pay a very generous 4.25% dividend. There’s a lot more to this story, but the bottom line is that ConocoPhillips (NYSE:COP) is one of the best stocks you can invest in today. Finally, the following slide from a recent investor presentation really sums up ConocoPhillips (NYSE:COP)’ new strategy and why it tops my list:


Source: ConocoPhillips investor presentation.

Enterprise Products Partners L.P. (NYSE:EPD)
The growth in U.S. oil and gas production has created a massive bottleneck in takeaway capacity, which has produced tremendous growth opportunities for Enterprise. To meet those opportunities, it has spent more than $3 billion in each of the past three years. However, the company has been very disciplined in funding this growth, as evidenced by a leverage ratio that has actually been declining as the company has retained cash flow and sold lower-yielding assets to keep its leverage in check.

Looking ahead, Enterprise Products Partners L.P. (NYSE:EPD) has $7.5 billion in growth projects under construction through 2015, with a number of opportunities further ahead. As these projects come online, the cash flow will drive additional distribution growth as the company continues to grow an already healthy 4.4% distribution. Again, like ConocoPhillips (NYSE:COP), Enterprise Products Partners L.P. (NYSE:EPD) is one of the very best energy stocks to invest in for the long term.

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