Top Energy Stocks Offering High Returns for Investors with a $500 Budget at Present
There's a major shift happening in the energy sector, and it's time for long-term investors to get ready. Two smart high-yield energy stocks to consider right now are TotalEnergies and Enbridge, especially if you've got $500 or more to play with.
What's happening in energy?
The transition to cleaner energy sources might not be happening quickly, but make no mistake – it's happening. In the past, energy transitions have been gradual, generating plenty of time for companies – like oil companies – to keep hauling in profits. However, falling behind on this green wave isn't an option if you prioritize long-term gains.
So, should you go all-in with a pure play on the clean energy revolution – like Brookfield Renewable, for example? That's certainly one way to go. Brookfield offers a diverse, globe-trotting portfolio of clean energy businesses spanning hydroelectric, solar, wind, storage, and nuclear, with yields as high as 6.3%.
But sticking to integrated majors like TotalEnergies and Enbridge is another option. These firms let you cash in on the consistent dividends from oil and natural gas, all the while preparing for the changing world and channeling their revenues toward cleaner energy innovations.
TotalEnergies is embracing the green future
TotalEnergies is a French energy powerhouse with an integrated business covering exploration, production, pipelines, and refining. But before you cast it aside as a relic of the fossil fuel era, check this out: TotalEnergies announced plans in 2020 to significantly ramp up its investments in clean energy.
True to its word, TotalEnergies hasn't shied away from its clean energy commitments, even as its traditional oil and gas operations remain robust. In fact, the company's electric and clean energy business made up about 10% of its adjusted net income through the first nine months of 2024 – a figure that's bound to rise and fall as market conditions sway.
Think of TotalEnergies as an investment that hedges your bets: You still profit from the hale and hearty oil and natural gas markets, but you get a front-row seat to the world's shift toward a more sustainable energy landscape.
Enbridge is bridging the gap
Much like TotalEnergies, Enbridge is an energy giant that generates high yields from its toll-taking midstream assets – but there's a crucial difference between the two. Enbridge is ,progressively transitioning its wealth of oil and natural gas assets to clean and renewable sources, thanks to its recent acquisition of three natural gas utilities.
Now, Enbridge's green gas earnings account for 47% of its earnings before interest, taxes, depreciation, and amortization (EBITDA), while the oil's share has dropped to 50%. Meanwhile, Enbridge's clean energy investments make up about 3% of its overall EBITDA, a number that will likely climb up with time.
Name a better way to balance between the old and the new: You've got a reliable dividend earner in Enbridge, and the chance to gain from the company's forward-thinking clean energy endeavors.
Your move, investors
Investing in TotalEnergies and Enbridge is a smart way to pivot towards a greener energy future while keeping your dividend payouts flowing. They might not be as spicy as a full-throttle play on renewables, but they can certainly provide you with a solid mix of yield and growth.
And hey, who knows? Maybe one day they'll be leading the charge when the clean energy revolution hits turbo-drive – or if you prefer, when the green wave washes up on the shore of historical dividend record highs.
Given the context, here are the two sentences that contain the words 'finance', 'money', and 'investing':
- For long-term investors, it's crucial to allocate some finance towards energy stocks that are prepared for the transition, such as TotalEnergies and Enbridge, as these companies offer promising returns with their consistent dividends and investments in clean energy innovation.
- If you're interested in investing in energy stocks, considering companies like TotalEnergies and Enbridge might be a wise move, as they offer a blend of decent yields from their traditional hydrocarbon operations while also investing in renewable energy sources, which could potentially lead to greater financial gains in the long run.
