Over the past few years, rapid growth in the cloud, artificial intelligence, and data center markets has outstripped global energy supplies, leading to global energy shortages. Geopolitical conflicts, tariffs and sanctions add to this pressure.
To profit from this trend, investors should invest in well-run energy companies that pay generous dividends and distributions. Let’s take a look at two of my favorite income-producing energy stocks – Chevron (NYSE: CVX) and Enterprise product partners (NYSE:EPD) — and see why they’ll be able to fund investors’ retirements for decades to come.
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Chevron, one of the world’s largest conglomerates, is a quintessential dividend stock, with a forward yield of 3.6% and has raised its dividend for 39 consecutive years. It provides upstream and downstream services and produces chemicals, plastics and industrial materials.
Chevron gets most of its oil and gas from the United States, Kazakhstan and Australia, so it is less affected by conflicts in the Middle East than most of its big oil peers. However, soaring oil prices will still boost its upstream profits, generate more cash for its dividends and buybacks, and improve the overall economics of its expensive mega-projects.
Analysts expect Chevron’s earnings per share to grow at a compound annual growth rate of 16% from 2025 to 2028. This growth will be driven by the expansion of Kazakhstan’s Xintian Giz field, which is targeted to produce about 1 million barrels of oil per day, as well as the expansion of major fields in the Permian Basin, which already produces more than 1 million barrels of oil per day.
Chevron will also launch new deepwater projects in the Gulf of Mexico, expand its natural gas projects in Australia and expand its operations in Guyana, one of the world’s fastest-growing oil regions, through its recent acquisition of Hess. Its total oil production is expected to grow by 2%-3% annually by 2030. These catalysts make Chevron an easy way to profit from the energy boom, and its stock remains reasonably valued at 22 times next year’s earnings.
Enterprise Products Partners is a midstream company operating more than 50,000 miles of pipeline in 27 states. By charging upstream and downstream companies to use its pipelines to transport oil, natural gas, natural gas liquefied (NGL) and other refined products, it operates a “toll road” model that is well insulated from commodity price swings. However, it will also benefit from surging demand for more oil and gas.
