This integrated energy company finds and produces oil and natural gas, refines crude into fuels, and makes chemicals and lubricants for customers worldwide. It pays a 2.60% forward dividend yield and just raised its payout for the 44th straight year. Its 3-year dividend growth rate of 4% is steady rather than fast, which fits a company that funds raises from cash flow instead of stretching its balance sheet. The stock also carries a beta of just 0.14, so its monthly price moves have had very little connection to the broader stock market over the past 5 years.
The company’s refineries ran at record levels last quarter, and earnings per barrel in its fuels business have roughly tripled since 2019. Growth projects in South America, the Permian Basin and liquefied natural gas give it a long runway that does not depend on today’s tight energy markets. The main risks come from Middle East conflict, which has cut some of its production, and from lower oil prices that trimmed upstream earnings. Analysts expect earnings per share to fall 9% next year.
We increased our position in this holding within the Best Dividend Stocks Portfolio because it pairs a rising dividend with unusually low portfolio risk. Its debt load is light, its payout is well covered, and its operations are positioned to keep funding income through the energy cycle.
