Want Exposure to Energy and an Attractive Dividend? Buy This Stock
With so many factors impacting stocks, it can be tough to decide which stock to buy in the current market environment. One thing is for sure, though: with all the tailwinds that oil and gas prices have right now, energy stocks are some of the best investments to buy today.
Many of these high-quality energy stocks have already been growing rapidly, showing investors the capital gains they are capable of generating. However, there are also plenty of energy stocks to buy that can offer investors a high-yield dividend.
As long as you can find stocks that have low and consistent costs, they can be excellent long-term investments for passive-income seekers. This way, the company can budget its revenue and expenses well, and unless commodities prices really tank, these stocks should be able to continue paying cash back to investors.
So, if you’re looking to gain exposure to energy today and find high-quality dividend stocks to buy, here are two of the best stocks to consider right now.
Natural gas stocks are some of the best energy companies to buy for the long haul
Energy stocks have always been one of the best industries to invest in, given how crucial energy is to the economy and how volatile commodities prices can be. Energy stocks have always been companies that can grow your capital rapidly when the industry sees strong tailwinds.
And right now, if you’re looking to buy energy stocks that you can own for years, some of the best to consider are natural gas stocks.
Natural gas is the cleanest form of fossil fuel. Therefore, over the coming decades, as we try to shift to cleaner energy, natural gas will be a crucial commodity to use in place of coal and then oil. This makes natural gas stocks some of the best energy stocks you can buy today.
Right now, oil demand is massively outpacing supply due in large part to the sanctions recently imposed on Russia. Eventually, though, decades from now, we will be reducing the oil we use in our economy, and that’s when natural gas will be one of the most important commodities.
That’s why a low-cost producer like Peyto Exploration and Development (TSX:PEY) is one of the best energy stocks to buy now. Peyto is a low-cost producer with an excellent management team that’s always looking out for the long-term interests of shareholders.
So, while the stock may experience periods of poor performance, such as it did during the first year of the pandemic, over the long run, because it’s such low-cost stock and because natural gas can rise rapidly in price, it’s one of the best energy stocks you can buy.
Last fall, as it was clear that the stock was recovering well, it increased its dividend by a whopping 15 times. And today, that dividend still offers a yield of roughly 4.2%, despite the fact that Peyto has rallied over 50% so far year to date.
Therefore, if you’re looking for high-quality energy stocks to buy and hold that can pay you an attractive dividend, Peyto is one of the best to consider today.
The post Want Exposure to Energy and an Attractive Dividend? Buy This Stock appeared first on The Motley Fool Canada.
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Fool contributor Daniel Da Costa has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.
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