3 High-Yield Energy Stocks to Buy as Crude Oil Continues to Climb

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3 High-Yield Energy Stocks to Buy as Crude Oil Continues to Climb


After two-and-a-half years of giving income investors false hopes of a recovery, the energy infrastructure sector is now ready to stage a sustained positive price trend. Investors are renewing interest in these sectors. Now is the time to buy into these companies for attractive current yields, dividend growth and price appreciation.

Energy infrastructure (also called energy midstream) companies provide the assets and services which move energy commodities (crude oil, natural gas, refined products and natural gas liquids, also referred to as NGLs) from the production areas to the end users. The assets in the sector include pipelines, storage facilities, processing facilities, and all kinds of terminals. Here are some of the current events that point to higher midstream values as we move further through 2018.

The rise in the price of crude oil has increased investor interest in the overall energy sector. The crude price increase has come even as U.S. crude oil production has continued to climb. The production growth in the Permian oil play is well covered, and higher oil prices will result in more drilling in other production areas. Coverage of the energy sector by the financial news outlets is growing.

A recent Wall Street Journal article Is the U.S. Shale Boom Hitting a Bottleneck, highlighted the need for even more pipelines to move crude oil and natural gas out of the Permian.

Over the last two years, the midstream energy companies were forced to rethink their financial structures and how they managed their balance sheets. There have been distribution rate reductions, but most of those are now history. At this point the payouts from the larger companies are secure and investors can look forward to future dividend growth. Current yields are very attractive.





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