These natural gas stocks are likely to soar amidst a robust profitability outlook
- These natural gas stocks that pay dividends are trading at attractive valuations and are strong buffers against market volatility at this time.
- Enbridge (ENB): Profitable outlook for 2023 offers a tremendous upside for ENB stock.
- Enterprise Products Partners (EPD): Trading 20% to 30% below analyst price targets with a sizeable dividend yield.
- Equinor (EQNR): EBITDA margins have grown over 35% over the past five years.
Natural gas stocks that pay dividends are a great option for investors prioritizing stability and income.
Although they may not bring significant capital growth, they can lower an investor’s portfolio risk. Therefore investing in natural gas stocks that pay dividends can create a win-win situation, providing safety and reliability while bolstering financial returns.
The future of the global natural gas market looks exciting, with the sector expected to grow by 6.9% by 2026. New opportunities are opening up as suppliers create alternative supply sources and producers search for new prospects.
This further enables companies to enter the market or increase their share as the end markets move away from Russian gas. This shift brings fresh perspectives to a mature market and provides enticing possibilities for growth in the coming years.
|EPD||Enterprise Products Partners||$25.57|
With a dividend yield of over 6.3%, Enbridge (NYSE:ENB) remains a strong and stable lower-risk option for long-term growth.
The energy infrastructure and services behemoth is responsible for operating some of the world’s most extensive networks. It transports natural gas across the U.S. and powers green energy capacity.
With its wide moat, ENB is well-positioned to deliver returns in both bull and bear markets, enabling any investor peace of mind in an otherwise chaotic investing environment.
ENB had an impressive year in 2022, setting full-year revenue guidance for adjusted EBITDA of $15 billion to $15.6 billion.
The firm has provided EBITDA guidance of $15.9 billion to $16.5 billion for the year. With a profitable outlook on the horizon, Enbridge is pressing forward with optimism, ready to deliver another banner year in 2023.
Enterprise Products Partners (EPD)
Enterprise Products Partners (NYSE:EPD) stock is an extremely attractive investment because of its high dividend yield of over 7.5%. This is mainly due to the nature of its business; managing pipelines, storage terminals, processing plants, and shipping terminals and being backed by long-term contracts that bring in reliable cash flows. Therefore, investing in EPD stock remains beneficial when considering both yield and long-term safety.
With energy prices forecasted to remain high through 2023, investors should be optimistic about the midstream sector, particularly firms such as EPD. These companies are positioned to benefit from higher pricing power due to the strong demand for energy resources.
The stock has been trading at 20% to 30% below analysts’ recommended price target, and its sizable dividend yield makes it more attractive. So, all signs indicate that the firm will continue enjoying a robust future over the medium term.
Equinor (NYSE:EQNR) is a Norwegian oil and gas player with over $110 billion in market capitalization.
The firm has a tremendous track record of growing its sales and earnings at an incredible pace. Furthermore, it boasts an impressive hydrocarbon output while heavily investing in renewable energy sources.
With one foot firmly planted in the present while continuing to look ahead to the future, Equinor makes a great investment option today and down the line.
A look at its glowing financials makes it a no-brainer investment in the sector. On average, its gross and EBITDA margins have been growing by over 35% over the past five years. Moreover, its FCF margins have also grown over 30% on a trailing-twelve-month basis. With a robust balance sheet, the stock trades at just 0.7 times forward sales.
This post originally appeared at InvestorPlace.
On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.