In this article, we are going to discuss the best energy stocks to buy for dividends in 2026.
The S&P Energy index delivered gains of almost 5% in 2025, compared to the total returns of 16.4% by the S&P 500. Although the late-year decline in crude prices pushed the overall energy sector to lag, some industry segments performed well. While upstream producers struggled, refiners, integrated majors, and midstream companies posted far stronger results.
With the industry facing oversupply issues and a low-priced environment, investors rewarded companies that demonstrated durability, capital discipline, and downstream leverage over pure production growth. This trend was observed throughout last year and is likely to persist also in 2026, with winners to be determined less by the movement of oil prices and more by execution, capital discipline, and where each player positions itself along the value chain.
The rising geopolitical tensions and the recent US action in Venezuela could also have a major impact on the energy sector going forward. While it will still take significant time, investment, and some much-needed political stability to revive Venezuela’s crumbling infrastructure, it remains a fact that the country’s oil reserves are the largest on the planet and could provide a concrete advantage to companies that play their cards right.
With that said, here are the Best Energy Dividend Stocks to Buy Now.
Our Methodology
To collect data for this article, we referred to several stock screeners to identify energy stocks with the most hedge fund investors in the Insider Monkey database as of the end of Q3 2025. Then we shortlisted the stocks that had an annual dividend yield of at least 3% as of January 19, 2025. The following are the Best Energy Dividend Stocks According to Hedge Funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).
11. Canadian Natural Resources Limited (NYSE:CNQ)
Number of Hedge Fund Holders: 45
Dividend Yield as of Jan. 19: 4.97%
Canadian Natural Resources Limited (NYSE:CNQ) is a senior crude oil and natural gas production company, with continuing operations in its core areas located in Western Canada, the UK portion of the North Sea, and offshore Africa.
According to reports on January 14, Canadian Natural Resources Limited (NYSE:CNQ) is in talks to acquire a $1-billion-plus portfolio of natural gas properties in Alberta from Tourmaline Oil. Tourmaline is among the biggest natural gas producers in Canada’s Montney Basin shale play, which produces around 10 bcf/d of natural gas, or roughly half of the country’s output. The basin has recently garnered significant interest following the launch of the LNG Canada export terminal in British Columbia last year.
Canadian Natural Resources Limited (NYSE:CNQ) witnessed a sharp downturn earlier this month following the US action in Venezuela, as it significantly increased the prospects of the US Gulf Coast refiners shifting from Canadian to Venezuelan crude, since the two are similar. Additionally, there have also been concerns that the cheaper Venezuelan oil pouring into the US would push down the price that American buyers pay to Canadian producers, driving down margins and profits. However, the stock has recovered since then as markets came to the realization that it will still take much time and investment, as well as some much-needed political stability, for Venezuelan crude to enter the United States.
10. Phillips 66 (NYSE:PSX)
Number of Hedge Fund Holders: 47
Dividend Yield as of Jan. 19: 3.47%
Phillips 66 (NYSE:PSX) is a leading integrated downstream energy provider that is engaged in refining, transporting, and marketing fuels.
Phillips 66 (NYSE:PSX) received a boost on January 16 when Scotiabank analyst Paul Cheng raised the firm’s price target on the stock from $133 to $140, while maintaining a ‘Sector Perform’ rating on the shares. The revision comes as the firm adjusted its price targets for the US Integrated Oil, Refining, and Large Cap E&P stocks under its coverage. The analyst expects earnings for the quarter to be straightforward, as there were no major weather disruptions this winter.
On the other hand, JPMorgan lowered its price target on Phillips 66 (NYSE:PSX) from $154 to $151 on January 13, but the firm kept its ‘Overweight’ rating on the shares. The updates come as the analyst firm adjusted its targets for recent commodity prices as part of a preview for the fourth quarter.
With a robust annual dividend yield of 3.47%, Phillips 66 (NYSE:PSX) was recently included in our list of the Best Energy Stocks for a Retirement Stock Portfolio.
9. BP p.l.c. (NYSE:BP)
Number of Hedge Fund Holders: 47
Dividend Yield as of Jan. 19: 5.54%
BP p.l.c. (NYSE:BP) is a British multinational company recognized worldwide for quality gasoline, transport fuels, chemicals, and alternative sources of energy such as wind and biofuels.
BP p.l.c. (NYSE:BP) revealed on January 14 that it expects its net debt to have dropped to $22 billion–$23 billion by the end of 2025, down from $26.1 billion in the third quarter. The much-needed downturn was aided by around $5.3 billion in divestments, excluding the $6 billion from the sale of the company’s majority stake in its Castrol lubricants unit. The London-based company is targeting to cut its debt load to $14 billion–$18 billion by 2027.
BP p.l.c. (NYSE:BP) is looking to optimize its operations and has pledged to slash up to $5 billion in costs and divest $20 billion in assets by 2027. The company also continues its strategic refocus on fossil fuels and expects to book $4 billion to $5 billion in Q4 impairments, mainly tied to its low-carbon energy businesses.
BP p.l.c. (NYSE:BP) boasts an impressive annual dividend yield of 5.54%, putting it among the 12 Best Crude Oil Stocks to Buy for Dividends.
8. Shell plc (NYSE:SHEL)
Number of Hedge Fund Holders: 48
Dividend Yield as of Jan. 19: 3.86%
Shell plc (NYSE:SHEL) is an integrated energy company with operations spanning exploration, production, refining, marketing, and chemical manufacturing, alongside growing investments in biofuels and hydrogen.
Shell plc (NYSE:SHEL) announced on January 8 that it expects upstream production to come in at about 1.84 mboed to 1.94 mboed in Q4 2025, reflecting the incorporation of the Adura joint venture in the UK. This is up from 1.83 mboed in the previous quarter. Meanwhile, integrated gas production is projected to be within previous guidance at 930,000 boed to 970,000 boed, remaining broadly flat with the third quarter. The energy giant is also forecasting refining margins to rise to an indicative $14 per barrel, up from $12 per barrel in Q3.
That said, Shell plc (NYSE:SHEL) expects its Chemicals and Products segment to be the weakest performer, with its earnings projected to be below break-even for the fourth quarter. This is due in part to ‘significantly lower’ oil trading results as crude prices dropped. Moreover, the segment is dropping due to falling chemical margins, which are expected to fall to $140 per ton from $160 per ton in Q3.
7. Chord Energy Corporation (NASDAQ:CHRD)
Number of Hedge Fund Holders: 49
Dividend Yield as of Jan. 19: 5.63%
With its premier acreage position in the Williston Basin, Chord Energy Corporation (NASDAQ:CHRD) engages in the exploration and production of crude oil, natural gas liquids, and natural gas.
On January 16, Scotiabank analyst Paul Cheng reduced the firm’s price target on Chord Energy Corporation (NASDAQ:CHRD) from $120 to $114, but maintained a ‘Sector Perform’ rating on the shares. The adjustment comes as the analyst firm revised its price targets for the American Integrated Oil, Refining, and Large Cap E&P stocks under its coverage. Scotiabank expects earnings for the quarter to be straightforward due to no major weather disruptions this winter.
Similarly, on January 17, Jefferies slightly lowered its price target on Chord Energy Corporation (NASDAQ:CHRD) from $101 to $99, while keeping a ‘Hold’ rating on the shares. The revised target, which still indicates an upside of almost 8% from the current levels, comes as part of the firm’s preview of Q4 earnings. The analyst expects the softening service environment to drive an improvement in Chord’s capital efficiency, allowing the company to beat CapEx consensus in 2026.
6. Ovintiv Inc. (NYSE:OVV)
Number of Hedge Fund Holders: 52
Dividend Yield as of Jan. 19: 3.02%
Next on our list of the Best Energy Stocks to Buy for Dividends is Ovintiv Inc. (NYSE:OVV), a leading North American exploration and production company focused on developing its high-quality, multi-basin portfolio.
On January 16, BofA analyst Kalei Akamine slightly nudged the firm’s price target on Ovintiv Inc. (NYSE:OVV) from $53 to $54, while keeping its ‘Buy’ rating. Given the current low-priced environment, the analyst continues to favor companies with resilient portfolios and low breakevens, enabling them to fully cover their CapEx and payouts.
Ovintiv Inc. (NYSE:OVV) is undergoing a disciplined portfolio shift, concentrating its capital into higher return assets in the Midland Basin and Western Canada. With its recent acquisition of NuVista and its plans to divest its Andarako assets, BofA expects the company’s pro forma net debt to fall well below target levels, enabling it to raise its buybacks and even head on a pathway toward a 100% cash-return framework. As a result, BofA has tapped Ovintiv as its top oil pick for 2026.
Similarly, on January 17, Jefferies analyst Lloyd Byrne also raised the firm’s price target on Ovintiv Inc. (NYSE:OVV) from $52 to $54, while maintaining a ‘Buy’ rating on the shares.
5. HF Sinclair Corporation (NYSE:DINO)
Number of Hedge Fund Holders: 53
Dividend Yield as of Jan. 19: 4.11%
HF Sinclair Corporation (NYSE:DINO) is an independent petroleum refiner in the United States with operations throughout the mid-continent, southwestern, and Rocky Mountain regions.
On January 16, Piper Sandler reduced its price target on HF Sinclair Corporation (NYSE:DINO) from $68 to $67, while keeping an ‘Overweight’ rating on the shares. The lowered target still indicates an upside of over 39% from the current share price. The change comes as the analyst firm cut its Q4 2025 EPS estimates for HF Sinclair from $0.96 per share previously to $0.44 per share, while also reducing its EBITDA forecasts from $473 million previously to $358 million. The downturn is driven by a weaker-than-expected West Coast performance, specifically lower refining capture rates and throughput, and a modest adjustment to the refining company’s Lubes segment. However, despite the challenges, Piper Sandler remains bullish on DINO heading into the new year, as it views these West Coast issues as ‘non-recurring’.
Similarly, on the same day, Scotiabank analyst Paul Cheng also lowered the firm’s price target on HF Sinclair Corporation (NYSE:DINO) from $66 to $62, while maintaining an ‘Outperform’ rating on the shares.
4. EOG Resources, Inc. (NYSE:EOG)
Number of Hedge Fund Holders: 61
Dividend Yield as of Jan. 19: 3.87%
EOG Resources, Inc. (NYSE:EOG) is one of the largest crude oil and natural gas exploration and production companies in the United States, with proved reserves in the US and Trinidad.
On January 16, Scotiabank analyst Paul Cheng lowered the firm’s price target on EOG Resources, Inc. (NYSE:EOG) from $130 to $123, but kept its ‘Sector Perform’ rating on the stock. The revision comes as the analyst firm updated its price targets on the US Integrated Oil, Refining, and Large Cap E&P stocks under its coverage. Scotiabank is expecting Q4 earnings to be fairly straightforward, since there were no major weather disruptions this winter.
EOG Resources, Inc. (NYSE:EOG) suffered another blow on the same day when KeyBanc downgraded the stock from ‘Overweight’ to ‘Sector Weight’, without assigning it a price target. The downgrade comes on degradation concerns, as the analyst sees ‘clear signs’ of degradation in both the Eagle Ford and Delaware Basin and a significant decline in activity at Eagle Ford. Given the current low-priced environment in oil and the high volatility in natural gas, KeyBanc has kept a more selective view of the sector as we enter 2026.
3. ConocoPhillips (NYSE:COP)
Number of Hedge Fund Holders: 72
Dividend Yield as of Jan. 19: 3.24%
ConocoPhillips (NYSE:COP) is one of the world’s largest independent E&P companies based on oil and natural gas production and proved reserves.
On January 20, JPMorgan analyst Arun Jayaram downgraded ConocoPhillips (NYSE:COP) from ‘Overweight’ to ‘Neutral’, while keeping the firm’s price target on the stock unchanged at $98. The downgrade comes as JPM revised its ratings in the integrated oils sector as part of its 2026 outlook. The analyst thinks COP trades at a premium FCF/EV yields compared to its Big Oil peers in 2026-27, but still views the energy giant as a long-term core holding primarily due to its portfolio strength, inventory durability, and shareholder-friendly cash return framework.
Similarly, on January 16, BofA also downgraded ConocoPhillips (NYSE:COP) from ‘Neutral’ to ‘Underperform’, while assigning the stock a price target of $102. The analyst highlighted that the company’s oil breakeven point of $53 per barrel and free cash flow yield of 4.4% are ‘uncompetitive’ within the E&P group.
ConocoPhillips (NYSE:COP) was recently included among the 10 High Yield Crude Oil Stocks to Buy After Trump’s Blitz in Venezuela.
2. Chevron Corporation (NYSE:CVX)
Number of Hedge Fund Holders: 89
Dividend Yield as of Jan. 19: 4.11%
Chevron Corporation (NYSE:CVX) manufactures and sells a range of high-quality refined products, including gasoline, diesel, marine and aviation fuels, premium base oil, finished lubricants, and fuel oil additives.
On January 20, JPMorgan resumed coverage of Chevron Corporation (NYSE:CVX) with an ‘Overweight’ rating and a price target of $176, indicating an upside of over 6% from the current levels. Following the completion of the long-awaited Hess merger, the analyst thinks that Chevron is in an attractive phase of its investment cycle. Moreover, the oil major has been working on a structural cost savings program, putting it on track to deliver $3 billion-$4 billion in annual run-rate savings by 2026.
Moreover, Chevron Corporation (NYSE:CVX) is looking to capitalize on the AI boom and is in exclusive talks to provide natural gas-fired power to a data center, leveraging its large domestic production base of over 3 Bcfd. While a deal hasn’t been secured yet, the company expects to reach a final investment decision in the first half of this year and deliver first power by 2027-28. JPMorgan’s Arun Jayaram estimated that the data center project could generate mid-teens unlevered returns on capital.
1. Exxon Mobil Corporation (NYSE:XOM)
Number of Hedge Fund Holders: 93
Dividend Yield as of Jan. 19: 3.17%
Topping our list of the Best Energy Stocks for Dividends is Exxon Mobil Corporation (NYSE:XOM), one of the largest integrated fuels, lubricants, and chemical companies in the world.
Exxon Mobil Corporation (NYSE:XOM) received a boost on January 20 when JPMorgan analyst Arun Jayaram raised the firm’s price target on the stock from $124 to $133, while maintaining an ‘Overweight’ rating on the shares. The revision is based on valuation concerns and comes as the bank adjusted its ratings and targets in the integrated oils sector as part of its 2026 outlook.
According to JPMorgan, while the oil group continues to suffer from oversupply issues, the downstream sector presents a more constructive outlook. The analyst finds the US oil majors to be more attractive than their Canadian counterparts amid the rise in ongoing geopolitical tensions.
In other news, Exxon Mobil Corporation (NYSE:XOM) revealed earlier this month that it expects upstream earnings to fall by as much as $1.2 billion in Q4 when compared to the previous quarter, pushed down by low prices. According to LSEG, Wall Street now expects Exxon to post adjusted earnings of $1.66 per share in its fourth quarter report later this month, down from $1.88 per share in Q3.
While we acknowledge the potential of XOM to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than XOM and that has 100x upside potential, check out our report about this cheapest AI stock.
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