Look for Energy Stocks to Have Another Strong Year in 2022 + 3 Top Ultra-High-Yield Energy Stock Picks

Ryan Troup January 18, 2022Last Updated: June 2, 2022

1 2 minutes read

There were several strong sectors of the stock market in 2021. Many tech names soared to all-time highs, even with supply chain shortages and COVID-19 cases at pandemic highs.

Cryptocurrencies like Bitcoin and Ethereum paid off handsomely for investors, even if they’ve been dipping recently. The best performing asset class, though, was energy. The sector grew by nearly 48%, compared to 27% for the S&P 500.

After COVID-19 effectively shut down the global economy for 2020 and people/goods were travelling less, 2021 saw the world open back up. As travel picked up, more oil was being used, and previously beatdown down energy companies were the beneficiaries.

While the Omnicron variant has the world on edge over how easy it is spreading, 2022 should continue to see the world get back to “normal.” Part of that means a rise in interest rates, making value companies that pay dividends more attractive to investors. Below are three high-yield energy stocks that should benefit from these trends in 2022.

Chevron (NYSE: CVX)

The second-largest oil company in the United States, Chevron (NYSE: CVX), sports a 4.2% dividend yield. Chevron has raised its dividend for 34 years, is a member of the Dividend Aristocrats and is expected to rise again in 2022. Chevron should have no problem raising the dividend for the foreseeable future with the world continuing to open up for travel.

Chevron last traded at $127.97, up 7.3% YTD.

ExxonMobil (NYSE: XOM)

ExxonMobil (NYSE: XOM) narrowly edges out Chevron as the largest oil company in the U.S. It also has a bit longer record of raising its dividend (39 years to 34 years). With a current yield of 5% and another increase expected for 2022, ExxonMobil stands to reward its shareholders handsomely for their patience these last few years.

ExxonMobil last traded at $71.35, up 12.3% YTD.

Sunoco (NYSE: SUN)

The smallest company on this list also sports the highest dividend yield, at 7.6%. While the high yield might seem juicy to investors, it should be noted that Sunoco (NYSE: SUN) has not raised their dividend since 2016. However, the company sports a much lower valuation than both ExxonMobil and Chevron, so investors could see some growth in the share price to go along with the high yield.

Sunoco last traded at $43.16, up 5% YTD.

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