Three Energy Stocks Positioned for Strong Long-Term Returns

The energy sector has faced headwinds recently, with oil price declines weighing on performance. Yet the global economy’s continued reliance on reliable power sources—combined with the need for energy infrastructure modernization—creates compelling opportunities for investors seeking both income and growth. Here are three energy stocks that offer attractive potential through a combination of rising dividends, expanding cash flows, and exposure to transformative industry trends.

ConocoPhillips: The Cash Flow Champion

ConocoPhillips (NYSE: COP) stands out as a major oil and gas producer with exceptional operational efficiency. The company operates one of the industry’s deepest and most cost-effective portfolios, requiring only mid-$40 oil prices to fund its capital spending and around $10 more per barrel to support its dividend—a significant structural advantage.

With crude trading in the low $60s range, ConocoPhillips is generating substantial surplus cash that can fund shareholder returns. The company’s breakeven economics continue improving thanks to synergies from its Marathon Oil integration. Three large-scale liquefied natural gas (LNG) projects alongside the Alaska Willow development project should come online by 2029, translating into an incremental $6 billion in annual free cash flow at $60 oil prices.

This growing capital generation provides runway for meaningful dividend increases. ConocoPhillips currently yields 3.4% and recently raised its payout by 8%, with management targeting top-decile dividend growth among S&P 500 companies. The combination of rising cash flow, growing dividends, and planned share buybacks positions the company to deliver robust total returns for patient investors.

Oneok: The Midstream Consolidator

Oneok (NYSE: OKE) represents one of America’s largest energy midstream platforms, controlling critical pipeline infrastructure. The company’s business model generates predictable cash flows backed by long-term contracts and regulated rate structures—a significant advantage during uncertain market conditions.

Over the past several years, Oneok has aggressively expanded its footprint through transformational acquisitions. The 2023 purchase of Magellan Midstream Partners broadened its scope into crude and refined product logistics. More recently, the company secured controlling stakes in EnLink through two transactions totaling $10.2 billion, positioning it to capture hundreds of millions in cost synergies and operational improvements.

Management has also greenlit organic expansion projects including the Texas City Logistics Export Terminal and the Eiger Express Pipeline, with expected commercial operations by mid-2028. These growth engines should support sustainable 3-4% annual dividend increases on the company’s already attractive 5.6% yield. The stable cash generation coupled with consistent income growth creates potential for compelling total returns.

NextEra Energy: The Clean Energy Transition Play

NextEra Energy (NYSE: NEE) combines a regulated electric utility in Florida with an expanding renewable energy and infrastructure platform. The utility generates steadily growing earnings through rate-regulated operations serving a high-growth region, while the energy resources division pursues long-term contracted wind, solar, and transmission projects.

The company faces significant tailwinds from rising electricity demand. Its Florida utility plans to invest over $100 billion through 2032 to modernize the grid and support population growth. The energy resources platform is simultaneously building transmission capacity, expanding gas infrastructure, and developing new clean generation sources. These investments should underpin compound annual earnings growth exceeding 8% through 2035.

NextEra’s growth trajectory supports an accelerating dividend—management plans a 10% increase next year followed by 6% annual growth through at least 2028. At current valuations, investors can capture a 2.8% yield while benefiting from double-digit earnings expansion. This combination of income, growth, and exposure to clean energy trends offers meaningful appeal.

Building an Energy Portfolio

These three companies represent distinct segments of the energy ecosystem: upstream production, midstream logistics, and integrated utilities. Together, they offer investors exposure to multiple income streams and growth vectors within a resilient industry. ConocoPhillips provides near-term cash generation and dividend growth. Oneok delivers predictable income with consolidation upside. NextEra offers long-term earnings expansion tied to the clean energy transition.

Energy remains fundamental to global economic activity, and these stocks provide investors with vehicles to capture both current income and long-term capital appreciation. The combination of 2.8-5.6% yields, double-digit earnings growth potential, and strategic positioning within the energy landscape positions these equities to deliver compelling risk-adjusted returns through the coming years.