Before You Buy Chevron or Enterprise Products Stock: Here's 1 Energy Dividend Stock I'd Buy First
The past year has been painful for stock investors. The S&P 500 index, which tracks 500 of the largest U.S. stocks, is down 11% at this writing on Sept. 21, and over 19% below its 52-week high. Every single sector is down at least 4% from its high. The only stock sector that's delivered blowout returns so far this year is the energy sector; the Energy Select Sector SPDR ETF is up 70.5% in total returns, with almost 7% of those gains due to dividends.
Needless to say, this has investors -- especially those looking for dividends -- very interested in energy stocks right now. Two in particular are getting a lot of attention: Chevron (NYSE: CVX) and Enterprise Products Partners (NYSE: EPD). This makes sense, considering they're both cash-cow giants, with strong dividends yielding 3.6% and 7.2%, respectively at recent prices. But before buying either of these two giants, investors should also take a close look at Phillips 66 (NYSE: PSX), another diversified giant with a 4.6% yield and a better record of growing its payout.
While both Chevron and Enterprise Products are strong companies (I own Enterprise Products, too), there are some characteristics of Phillips 66 that are very compelling. Most importantly, they're things that can make it a strong investment across the energy cycle, supporting its dividend when we go from today's high oil prices to periods of oversupply that send prices -- and profits for oil producers -- down.
Source Fool.com
