The Worst Month for Stocks: Why September is Historically Tough
Despite the market’s generally apprehensive nature in September, income investors often ignore the fluctuations in stock prices. Instead, they prioritize reliable dividends and strong underlying business fundamentals. Here are three high-yield energy stocks that are worth considering this September:
1. Chevron (CVX)
Dividend History: Chevron has a remarkable record, increasing its dividend for 39 consecutive years, covering tumultuous times including global pandemics and oil market crashes. Their current quarterly payout stands at $1.78 per share, yielding over 3.5%.
Business Overview: As the world’s third-largest energy company, Chevron excels across the oil and gas sector and leads in natural gas production. The acquisition of Hess has bolstered their position in low-cost, high-return oil fields in Guyana.
Financial Resilience: Chevron can sustain its dividends and capital projects even if crude prices fall below $50 per barrel. With prices currently above $86, there’s potential for extended high earnings.
2. Enbridge (ENB)
Dividend Consistency: Enbridge boasts a 31-year streak of dividend increases and offers a more substantial forward dividend yield of approximately 5.6%.
Economic Significance: The company operates crucial pipeline networks that transport around 30% of North America’s crude oil and a fifth of the natural gas used in the U.S., making it essential to the continent’s energy economy.
Growth Potential: Enbridge has ambitious plans, pursuing up to $20 billion in growth projects by 2027, including new pipelines and renewable energy initiatives, with an eye on $50 billion in opportunities through 2030.
3. Enterprise Products Partners (EPD)
Distribution Growth: This master limited partnership has consistently increased its distribution for 28 years, boasting a yield exceeding 5.7%.
Operational Scope: Enterprise operates over 50,000 miles of pipelines, primarily focusing on natural gas liquids (NGLs). NGL demand is projected to surge, especially from markets in Asia and Europe, thanks to growing applications driven by AI technologies.
Market Leadership: The company holds a robust financial position, management aligned with unitholder interests, and a stellar balance sheet, making it a benchmark in the midstream industry.
Conclusion
While September is typically challenging for stock markets, savvy income investors can find opportunities within energy stocks like Chevron, Enbridge, and Enterprise Products Partners, all boasting strong dividends and growth potential.
