Published on: 2026-02-26
Dividend income in energy is only as reliable as the cash that funds it. In 2026, that reliability is being tested from both sides: oil markets are expected to soften, while power demand is rising as AI and data centers expand. The result is a sector where “high yield” is not enough to make it the best energy stocks to buy now.
According to the U.S. Energy Information Administration, Brent crude is projected to average approximately $58 per barrel in 2026, a decrease from about $69 per barrel in 2025. As a result, the sector is unlikely to benefit from higher prices, emphasizing the importance of fundamentals such as steady operating cash flow, disciplined capital allocation, manageable debt, and a demonstrated commitment to sustainable dividends.
| Rank | Pick | Ticker | Segment | Dividend / distribution yield (approx.) |
|---|---|---|---|---|
| 1 | Exxon Mobil | XOM | Integrated major | 2.7%–2.8% |
| 2 | Chevron | CVX | Integrated major | ~3.8% |
| 3 | Energy Select Sector SPDR | XLE | Energy ETF | ~2.7% |
| 4 | Enbridge | ENB | Pipelines / midstream | ~5.3%–5.5% |
| 5 | Enterprise Products Partners | EPD | Midstream | ~6.1% |
| 6 | MPLX | MPLX | Midstream | ~7.3%–7.4% |
| 7 | ONEOK | OKE | Midstream | ~5.2% |
| 8 | Kinder Morgan | KMI | Midstream | ~3.6% |
| 9 | Williams Companies | WMB | Natural gas infrastructure | ~2.9% |
| 10 | Phillips 66 | PSX | Refining / midstream | ~3.2% |
| 11 | Shell | SHEL | Integrated major | ~3.6%–3.8% |
| 12 | TotalEnergies | TTE | Integrated major | ~4.9%–5.1% |
The following dividend yield estimates are as of late February 2026 and are subject to change with market prices.
Dividend yield (approx.): 2.8%
Exxon is the “steady ship” pick for energy income. It has multiple engines that can generate income simultaneously: oil and gas production, fuel refining, and chemical sales. That mix can help smooth the ride when crude prices get choppy, which is exactly what dividend investors want in 2026, making it the best energy stock to buy now.
What to watch: Big project spending and oil-price downturns can still tighten cash flow if conditions stay weak.
Dividend yield (approx.): 3.8%
Chevron is often treated as a “dividend-first” major. It tends to keep payouts at the top of the priority list, which is why income investors return to it when they want a familiar name with a clear shareholder-return mindset.
What to watch: Large projects, cost control, and geopolitical exposure can affect free cash flow in tougher markets.
Dividend yield (approx.): 2.7%
XLE is the simplest way to get energy dividend exposure without betting on a single company. You get a basket of major energy names, so one disappointing quarter from one stock matters less. If you want sector income with fewer surprises, this is the “set the table” option.
What to watch: The fund can still be heavily influenced by the biggest oil majors, so it will move with the energy cycle.
Dividend yield (approx.): 5.2%-5.3%
Enbridge is preferred by income investors due to its utility-like operations, which generate fee-based revenue from energy transportation. This business model reduces reliance on commodity price fluctuations and supports stable dividends during periods of oil price volatility, making it considerable for one of the best energy stock to buy now for reliable dividend income.
What to watch: Debt costs and regulatory decisions can influence future growth and payout flexibility.
Distribution yield (approx.): 6.1%
Enterprise is a classic “toll road” business for energy. It earns money by processing, moving, and storing products that keep flowing even when prices cool. That makes it a frequent favorite for income investors who prefer cash flow that looks more like a service business than a price forecast.
What to watch: It is a partnership structure, so tax paperwork may differ from that for regular dividend stocks.
Distribution yield (approx.): 7.3%-7.4%
MPLX sits in the “get paid to wait” corner of the energy industry. Instead of relying on where oil trades today, it earns much of its cash from moving, storing, and handling energy products through long-life infrastructure. When volumes stay steady, distributions tend to be steadier too, which is why income investors keep MPLX on the shortlist when they want yield with a business model that is less tied to daily price swings.
What to watch: A yield this high is never something to take on faith. It can be a genuine income opportunity, but it can also signal that the market wants extra compensation for risk, so payout coverage, debt levels, and funding plans deserve closer attention.
Dividend yield (approx.): 5.2%
ONEOK focuses on natural gas and related liquids infrastructure, which is increasingly important amid growth in liquefied natural gas (LNG) exports and rising power demand. The U.S. Energy Information Administration projects U.S. LNG gross exports to reach 16.4 billion cubic feet per day in 2026.
What to watch: Expansion spending and financing costs can affect the pace of dividend growth.
Dividend yield (approx.): 3.6%
Kinder Morgan is often chosen by investors who want pipeline-style income in a straightforward stock format. The business is built around moving energy, which can be less sensitive to daily commodity prices than drilling. It is not always the highest yield in the group, but it aims to be consistent, making it one of the best energy stock to buy now for reliable dividend income.
What to watch: Growth can be slower, and the stock can still react to broad energy sentiment.
Dividend yield (approx.): 2.9%
Williams Companies is closely linked to natural gas transportation and demand. Its frequent inclusion on dividend stock lists is due to natural gas serving as both a heating fuel and a reliability resource for power systems. In the United States, the expansion of data centers is already prompting grid upgrades and new capacity investments.
What to watch: Market mood swings can pull the stock around even when business performance is stable.ay fluctuate with the broader energy market, even if the company’s cash flow remains relatively stable.
Dividend yield (approx.): 3.3%
Phillips 66 adds a different angle: refining. Refiners can perform well when fuel margins are healthy, even if crude prices are not surging. That makes PSX a useful diversifier inside an energy income list and portfolio because it is driven by a different set of day-to-day forces.
What to watch: Refining is cyclical, and outages or weak fuel demand can dent results quickly.
Dividend yield (approx.): 3.6%
Shell offers global scale and multiple cash flow engines, including a meaningful LNG presence. For dividend investors, it is often a “balanced major” pick: broad operations, a strong capital-return focus, and the ability to adjust spending when markets soften.
What to watch: Currency moves, geopolitical exposure, and shifting global policy can add volatility.
Dividend yield (approx.): 4.9%
TotalEnergies often provides higher yields relative to other supermajors, which appeals to income-focused investors. The company maintains transparency by regularly publishing and updating its dividend schedules for shareholders.
What to watch: Commodity cycles still matter, and changes in capital-return plans can move the stock.
In the current market, reliable dividend income is typically provided by integrated oil majors, which offer diversified cash flow, and midstream pipeline operators, which generate fee-based income.
No. A very high yield may indicate that the stock price has declined due to concerns about potential dividend reductions. While midstream companies can offer elevated yields, it is important to monitor debt levels, capital expenditures, and the sustainability of payouts based on recurring cash flows.
An energy exchange-traded fund (ETF) such as XLE diversifies risk across multiple companies, reducing the impact of negative earnings reports or dividend cuts from individual firms. However, investors have limited control over the fund’s composition, and it may remain concentrated in a few large holdings.
A sustained decline in oil prices and weak demand can place significant pressure on sector cash flows. The U.S. Energy Information Administration’s projection of lower average Brent prices in 2026 underscores the importance of prioritizing business quality and payout discipline over headline yield.
Artificial intelligence and data centers are significantly increasing the demand for electricity and gas infrastructure. The International Energy Agency has identified these sectors as rapidly growing drivers of power demand, and recent U.S. policy developments indicate expansion in utilities and gas generation to accommodate this growth. This trend supports the long-term outlook for gas-linked infrastructure.
Energy sector dividends are expected to provide reliable income in 2026; however, the market increasingly prioritizes strong fundamentals. With oil prices projected to remain subdued, the best energy stocks for reliable dividend income in 2026 are those with the capacity to sustain payments throughout the cycle, rather than those offering the highest headline yields.
Disclaimer: This material is for general information purposes only and is not intended as (and should not be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by EBC or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.
