In this article, we are going to discuss the 15 best natural gas and oil dividend stocks to buy now.
Dividend stocks make for an essential long-term component of any portfolio, since dividend-paying stocks have historically performed better during market downturns. According to a recent study by Hartford Funds, dividend-paying stocks have declined by an average of 14.4% during major drawdowns over the last 50 years, against a 28.2% fall by non-dividend-paying stocks and 19.9% by the overall market.
The oil and gas industry is known for its commitment to shareholders, having paid $166.2 billion in dividends last year, up significantly from $118.9 billion it distributed in 2018. However, with the high volatility surrounding the global oil sector and a bleak future demand outlook, sustaining such a high level of payouts is becoming a problem.
This has forced a growing number of oil and gas companies to resort to significant cost-cutting measures and look for alternative sources of revenue, with a recent ray of hope emerging in the form of liquified natural gas. The global LNG demand is expected to grow by around 60% by 2040, largely driven by economic growth in Asia, emissions reductions in heavy industry and transport, as well as the impact of artificial intelligence.
Our Methodology
To collect data for this article, we referred to several stock screeners to find oil and gas stocks with the most hedge fund investors in the Insider Monkey database as of the end of Q2 2025. Then we shortlisted the stocks that had an annual dividend yield of at least 3% as of September 19, 2025. The following are the Best Oil and Gas 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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here)
15. Civitas Resources, Inc. (NYSE:CIVI)
No. of Hedge Fund Holders: 39
Dividend Yield as of Sep. 19: 6.41%
To make sure it keeps its shareholders happy, Civitas Resources, Inc. (NYSE:CIVI) increased its share repurchase authorization to $750 million in August, equal to around 28% of its market cap at the time. The company also announced plans to allocate 50% of its free cash flow after the base dividend to share buybacks on an annual basis, and the remainder to debt reduction.
To ensure a steady growth in margins and returns, Civitas Resources, Inc. (NYSE:CIVI) remains on track with its previously announced $100 million of cost optimization and efficiency initiatives. The company estimates the impact of this initiative to be $40 million in the current financial year.
That said, the share price of CIVI has plunged by over 35% since the beginning of 2025. Diamond Hill Capital, an investment management firm, stated the following about Civitas Resources, Inc. (NYSE:CIVI) in its Q2 2025 investment letter:
“Among our bottom individual Q2 contributors to return were Insperity and Civitas Resources, Inc. (NYSE:CIVI). Shares of oil and gas exploration and production company Civitas were pressured by the combination of growing macroeconomic concerns in the wake of April’s tariff announcements and OPEC’s announcement that it would unwind production cuts early, possibly materially increasing supply in a weaker demand environment and weighing on oil prices.”
Civitas Resources, Inc. (NYSE:CIVI) is an oil and gas exploration and production company with assets in Colorado and Texas.
14. Cenovus Energy Inc. (NYSE:CVE)
No. of Hedge Fund Holders: 41
Dividend Yield as of Sep. 19: 3.42%
Cenovus Energy Inc. (NYSE:CVE) made headlines this summer when the company announced that it would acquire MEG Energy in a C$7.9 billion cash-and-stock deal, creating one of the largest oil sands companies in Canada. However, the deal has fallen into controversy with a rival hostile bid in place and some shareholders criticizing Cenovus for undervaluing what is Canada’s last remaining pure-play oil sands company. That said, MEG’s board has endorsed CVE’s bid, which is set to be voted on by shareholders in October.
Cenovus Energy Inc. (NYSE:CVE) remains committed to its shareholders with returns of $819 million through dividends, share buybacks, and the redemption of $150 million of preferred shares in the second quarter of 2025. The company announced a quarterly dividend of C$0.2 per share in July and boasts an annual dividend yield of 3.42% as of the writing of this piece.
The share price of Cenovus Energy Inc. (NYSE:CVE) has surged by more than 21% over the last six months.
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.
13. Shell plc (NYSE:SHEL)
No. of Hedge Fund Holders: 44
Dividend Yield as of Sep. 19: 4%
Thanks to its strong cash generation and robust balance sheet, Shell plc (NYSE:SHEL) announced a $3.5 billion share buyback program in August, marking the 15th consecutive quarter in which the energy giant has announced $3 billion or more in buybacks. The company also declared an interim dividend of $0.358 per share back in July. At the end of the second quarter of 2025, Shell’s 4-quarter rolling shareholder distributions were 46% of its CFFO – in line with its target range of 40% to 50% of CFFO through the cycle.
To make sure it can sustain such high cash flows and thus payouts even in a low-priced environment, Shell plc (NYSE:SHEL) remains focused on reducing costs and improving efficiency. As of the end of Q2 2025, the company has achieved $3.9 billion in structural cost reductions since 2022, putting it firmly on track for its target of $5 billion to $7 billion by the end of 2028.
Shell plc (NYSE:SHEL) is a global group of energy and petrochemical companies, employing 96,000 people across more than 70 countries.
Hedge Fund Resource Center