In this article, we are going to discuss the best oil and gas dividend stocks to buy now.
Despite a slump in crude oil prices compared to last year, the world’s largest oil and gas companies have stuck to their dividend distribution policies, digging into their deep pockets to keep their shareholders happy.
According to Janus Henderson, the oil, gas, and energy sector reported an annual underlying dividend growth rate of 3% in 2024. The industry paid $166.2 billion in dividends last year, up significantly from $118.9 billion it distributed in 2018.
However, sustaining such a high level of returns is becoming increasingly difficult with time, given that the International Energy Agency (IEA) expects global oil demand to peak and plateau by the end of the decade, putting further downward pressure on prices. As a result, we are witnessing a growing number of oil and gas companies resort to significant cost-cutting measures and alternative sources of revenue to make sure they have enough cash available to maintain their massive payouts.
With that said, here are the Best Oil and Gas Dividend Stocks for Passive Income.
Our Methodology
To collect data for this article, we observed various companies operating in the oil and gas sector and then picked out companies with the highest dividend yields as of July 15, 2025, and that have maintained their dividend policies over the last few years. The following are the Best Oil and Gas Stocks with High Dividend Yields.
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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
12. Exxon Mobil Corporation (NYSE:XOM)
Dividend Yield as of July 15: 3.51%
Known for its high payouts to shareholders, Exxon Mobil Corporation (NYSE:XOM) has distributed more than $125 billion in dividends and buybacks over the last five years. The oil and gas behemoth boasted cash payouts of $9.1 billion only in the first quarter of 2025, including $4.8 billion of share buybacks.
Exxon Mobil Corporation (NYSE:XOM) keeps a steady track record of generating strong cash flows and has raised its payouts for 42 years in a row, putting it among the 11 Best Dividend Aristocrats to Invest in Now.
To maintain such heavy payouts, Exxon Mobil Corporation (NYSE:XOM) has grown its earnings at an annual rate of roughly 30% over the last five years, with its cash flow also rising at a CAGR of roughly 15% during the period. More impressively, the oil behemoth continues to advance at full steam, with aims to add a further $20 billion in earnings and $30 billion in cash flow by the end of the decade.
Exxon Mobil Corporation (NYSE:XOM) is one of the largest integrated fuels, lubricants, and chemical companies in the world. The company operates facilities and markets products around the globe and explores for oil and natural gas on six continents.
11. Shell plc (NYSE:SHEL)
Dividend Yield as of July 15: 3.99%
Another giant in the global oil and gas industry, Shell plc (NYSE:SHEL) distributed $5.5 billion among its shareholders in Q1 2025, including $3.3 billion in share repurchases and $2.2 billion in dividends. The company also announced a $3.5 billion share buyback program in May, which it expects to complete by the time of its Q2 2025 results announcement. This makes it the 14th consecutive quarter in which the crude oil producer has announced $3 billion or more in buybacks.
Shell plc (NYSE:SHEL) declared an interim dividend of $0.358 per share in May and currently boasts an annual dividend yield of 3.99%. Moreover, the company is able to maintain its shareholder payouts even in low-priced environments, given its low distribution breakevens – $40 Brent for dividends, and buybacks continuing at $50.
Artisan Partners stated the following regarding Shell plc (NYSE:SHEL) in its Q1 2025 investor letter:
“Shell is one of the world’s largest integrated oil and gas companies. The business has a durable portfolio of oil and gas resources, which includes a global leadership position in liquefied natural gas (LNG), an attractive and growing market.
The business has been materially transformed over the past two years by a new management team that understands value creation. CEO Wael Sawan and his team have adjusted the capital investment plan to be more focused on the core business and generating returns. Management has also used the company’s strong free cash flow (FCF) to add significant value for shareholders through capital allocation. Over the last three years, Shell has produced about $100 billion in FCF, and the management team has returned all of it through a combination of dividends, buybacks and debt reduction. The current market capitalization is about $200 billion, which means the company has returned over half the market cap to shareholders over the past three years…” (Click here to read the full text)
Shell plc (NYSE:SHEL) is a global group of energy and petrochemical companies, employing 103,000 people and with operations in more than 70 countries. The company is also the number one global lubricant supplier, as well as the top player in the rapidly expanding LNG sector.
10. Cenovus Energy Inc. (NYSE:CVE)
Dividend Yield as of July 15: 4.14%
Cenovus Energy Inc. (NYSE:CVE) returned C$595 million to shareholders through dividends, share buybacks, and the redemption of the preferred shares in the first quarter of 2025. The company also approved an 11% increase to its annual base dividend to C$0.80 per share, reiterating that its low breakeven allows it to grow its payout and sustain its business even at a $45 per barrel WTI oil price.
Despite a drop in global crude oil prices, Cenovus Energy Inc. (NYSE:CVE) managed to beat expectations in both revenue and profits in the first quarter of 2025. The company has several key development projects coming online in the near future that should help it sustain its earnings and shareholder payouts.
An important example is the West White Rose project, which is expected to start production in Q2 2026. The asset is of special significance since it will add 45,000 barrels per day that the company can sell at international pricing, rather than the discounted Western Canadian Select pricing that producers get on oil exported to the United States.
Cenovus Energy Inc. (NYSE:CVE) is an integrated oil and natural gas company, based in Calgary, Alberta, with operations that span Canada, the United States, and the Asia Pacific region.
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