If your dividend investment portfolio is feeling a little sluggish, it might be time to pick up the pace with a few energy dividend stocks.
Reduced inventories and improving economic growth are driving oil prices higher. U.S. economists are expecting GDP to continue to grow at a higher rate in Q4 2011 than it did in Q3, which will only push prices higher in the short term. GDP in the US is expected to be the same in 2012 as it will be in 2011. Oil is likely to remain above $90 a barrel for the foreseeable future.
Let’s take a look at the fundamentals of a few of my favorite dividend paying oil and energy stocks.
Sunoco Logistics Partners (NYSE:SXL)
Sunoco has all the right dividend statistics. They have a 5% dividend yield, a 5 year dividend growth rate over 10%, a 3 year net income growth rate of 42% and a low payout ratio at 40%. SXL is trading just about 3% off of its 52 week high of 101.95. These dividend fundamentals and it’s outstanding performance over the last year make SXL our top rated stock on our energy dividend stock list.
Seadrill is a stock that I covered in my stocks with high dividends article. SDRL has an outstanding dividend yield of 9%. Their payout ratio is under 60% and their 3 year net income growth rate is over 30%. Seadrill owns offshore drilling units all over the world and is well positioned to take advantage of rising oil prices.
Western Gas Partners (NYSE:WES)
Western Gas operates in Texas, the Rocky Mountains and the Mid-Continent. WES owns and operates gathering systems, treating and processing facilities and multiple pipelines.
While Western Gas isn’t our top rated energy dividend stock it still has impressive fundamentals. WES is currently paying an annual dividend of $1.68 giving it a 4.7% dividend yield. Their 3 year dividend growth rate is over 65% and their 3 year net income growth rate is over 50%. The payout ratio is a little high at just around 80% which is what keeps it from receiving a perfect rating on our dividend scale.
Holly Energy (NYSE:HEP)
Holly operates crude oil pipelines, storage tanks and distribution terminals. They transport gasoline and jet fuel to metro areas in Texas, New Mexico, Arizona and other surrounding states.
HEP has been increasing their dividend not just every year but every quarter for the last 4+ years. That shows a commitment to dividend increases. Holly currently has a dividend yield of 5.9% with a 5 year dividend growth rate of 5.6% and a 3 year net income growth rate of 15%.
TransCananda Corporation (NYSE:TRP)
TransCanada Corp is an energy infrastructure company that operates in North America. They own natural gas and oil pipelines. They also buy develop and operate power plants that provide services to energy and industrial customers.
TRP has a dividend yield of 4%. They have raised their dividend each year for the last 7 years and have been paying dividends since 1964. TransCanada has a 3 year dividend growth rate of 17% and a payout ratio of 77%.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.