Dividend stocks are a favorite among investors for good reason. They provide a steady income stream of passive income and offer a promising avenue for total return. Total return, a comprehensive measure of investment performance, encompasses interest, capital gains, dividends, and distributions realized over time.

24/7 Wall St. Key Points:

• Top Wall Street strategists feel that oil will trade between $65 and $75 in 2025
• Major exploration and production giants still make good money at those levels
• The energy sector lagged in 2024 and could be ready to move higher
• Do you have an energy allocation in your portfolio? Why not meet with a financial advisor in your area to review your holdings?

Despite the turmoil in the Middle East, oil has stayed quiet for most of 2024, and tensions can always flare up again in 2025. One thing is for sure: the new administration and President Trump will likely take a very tough stance once again on Iran, especially if it continues to feed money to proxy forces like Hamas and Hezbollah. Despite the President’s “Drill, Baby Drill” pledge, the United States averaged 13.2 million barrels daily in 2024, an annual production record.

While screening our 24/7 Wall Street energy research database, two giant exploration and production companies caught our eye. Both have yields significantly higher than the other global majors, and both are trading at levels that look like outstanding entry points now. In addition, both are buy-rated by major Wall Street firms we cover.

Why do we cover energy dividend stocks?

Since 1926, dividends have contributed approximately 32% of the total return for the S&P 500, while capital appreciations have contributed 68%. Therefore, sustainable dividend income and capital appreciation potential are essential for total return expectations.

BP

This company is a premier European integrated oil giant, paying shareholders a huge 6.71% divided. BP p.l.c. (NYSE: BP) engages in the energy business worldwide.

It operates through:

• Gas & Low Carbon Energy
• Oil Production & Operations
• Customers & Products
• Rosneft segments

BP produces and trades natural gas, offers biofuels, operates onshore and offshore wind and solar power generating facilities, and provides de-carbonization solutions and services, such as hydrogen and carbon capture, usage, and storage.

The company is also involved in the convenience and mobility business, which manages the sale of fuels to wholesale and retail customers, convenience products, aviation fuels, and Castrol lubricants; refining, supply, and trading of oil products; and operation of electric vehicle charging facilities.

In addition, it produces and refines oil and gas and invests in upstream, downstream, and alternative energy companies, advanced mobility, bio and low-carbon products, carbon management, digital transformation, and power and storage areas.

TotalEnergies SE

This French-integrated giant is another excellent European investment opportunity in the energy sector. It sports a hefty 6.14 % dividend. TotalEnergies SE (NYSE: TTE) is an integrated oil and gas company worldwide.

The company operates through four segments:

• Exploration and production
• Integrated Gas
• Renewables and power
• Refining and chemicals and marketing and services

The company’s Exploration & Production segment involves oil and natural gas exploration and production activities in approximately 50 countries.

Its Integrated Gas, Renewables & Power segment engages in:

• Liquefied natural gas (LNG) production
• Shipping, trading, and regasification activities
• Trading of liquefied petroleum gas (LPG), petcoke and sulfur, natural gas, and electricity
• Transportation of natural gas
• Electricity production from natural gas, wind, solar, hydroelectric, and biogas sources
• Energy storage activities; and development and operation of biomethane production units, as well as provides energy efficiency services

The TotalEnergies Refining & Chemicals segment refines petrochemicals, including olefins and aromatics, and polymer derivatives, such as polyethylene, polypropylene, polystyrene, and hydrocarbon resins. It also converts biomass and processes elastomers. This segment also trades and ships crude oil and petroleum products.

Its Marketing & Services segment produces and sells:

• Lubricants
• Supplies and markets petroleum products, including bulk fuel, aviation and marine fuel, special fluids, compressed natural gas, LPG, and bitumen; and fuel payment solutions

It also operates approximately 15,500 service stations.

Our readers should note that when Americans buy stocks or bonds from foreign-based companies, the investment income and capital gains may be subject to U.S. income tax and taxes levied by the company’s home country. The U.S. foreign tax credit allows a taxpayer to deduct the foreign taxes to offset the liability to the U.S.