Three Premium Oil Stocks Positioned for Dividend Growth and Capital Appreciation

The energy sector has faced headwinds this year, with oil stocks in the S&P 500 rising just 4% year-to-date compared to the broader market’s nearly 18% climb. Declining crude prices have weighed on performance. Yet despite near-term challenges, the fundamental demand for energy continues to expand, presenting strategic opportunities for patient investors seeking both income and appreciation. Here are three compelling oil stocks and energy-related equities that could deliver strong total returns through a combination of growing dividends and underlying business momentum.

Why Energy Markets Present Opportunity Right Now

The energy sector’s recent underperformance masks a compelling structural story. Lower oil prices are temporary headwinds, but energy consumption remains essential to global economic growth. The three companies highlighted below have positioned themselves to benefit from this enduring demand through different mechanisms: direct fossil fuel production, critical midstream infrastructure, and renewable energy infrastructure development. Together, they represent a diversified exposure to energy’s future.

ConocoPhillips: Scaling Production for Accelerating Cash Generation

ConocoPhillips (NYSE: COP) stands as a leading integrated oil and gas producer, distinguished by one of the industry’s most diversified and cost-efficient operating portfolios. The company operates profitably even at mid-$40s crude prices, with its dividend requiring approximately $50 per barrel. At current crude levels in the low $60s, the company is generating substantial surplus capital.

Looking ahead, ConocoPhillips projects meaningful cash flow expansion through operational improvements and major project completions. The company expects to reduce its breakeven threshold in coming years by capturing cost synergies from its Marathon Oil integration. More significantly, three large-scale liquefied natural gas facilities and the Willow project in Alaska should come online by decade’s end, adding an estimated $6 billion in annual free cash flow by 2029—assuming $60 oil prices. For context, the company generated $6.1 billion in free cash flow through the first nine months of 2025.

This expanding cash generation provides the financial foundation for meaningful dividend increases. With a current yield of 3.4%, ConocoPhillips recently hiked its payout 8% and aims to deliver top-decile dividend growth within the S&P 500 going forward. The company also plans to continue opportunistic share buybacks, creating a dual-pronged return strategy that could produce compelling total returns over the next several years.

Oneok: Midstream Infrastructure Generating Reliable Income Growth

Oneok (NYSE: OKE) represents the energy infrastructure alternative, as one of America’s largest midstream pipeline operators. The company benefits from stable, contracted cash flows underpinned by long-term agreements and regulated rate structures. This financial stability supports an attractive 5.6% dividend yield.

The company has aggressively expanded its infrastructure platform through strategic acquisitions. The transformational 2023 acquisition of Magellan Midstream Partners expanded Oneok’s reach into crude oil and refined petroleum logistics. This was followed by purchasing Medallion Midstream and a controlling stake in EnLink for $5.9 billion, before acquiring the remaining EnLink interest for $4.3 billion in early 2026. These transactions unlock substantial synergies and operational efficiencies.

Oneok projects hundreds of millions in cost savings and integration synergies over the coming years. Complementing this, the company has greenlit organic expansion, including the Texas City Logistics Export Terminal and the Eiger Express Pipeline, both slated for commercial operation by mid-2028. This combination of merger-driven cost reductions and organic growth should fuel 3-4% annual dividend growth, offering investors a compelling blend of current income and future appreciation.

NextEra Energy: Regulated Utility Growth Spanning Decades

NextEra Energy (NYSE: NEE) operates as a leading electric utility and energy infrastructure developer, combining two distinct growth engines. Its Florida-based utility generates predictable, rate-regulated earnings, while its energy resources platform delivers growing profits backed by long-term contracts and regulatory frameworks. These streams support a 2.8% dividend yield.

The company is investing aggressively to meet accelerating power demand across America. Its Florida utility alone plans to deploy more than $100 billion through 2032 to expand generation and transmission capacity. Simultaneously, the energy resources segment is investing billions in electricity transmission, gas pipeline expansion, and clean power development. These multi-year capital deployments should generate 8%+ compound annual earnings-per-share growth over the next decade.

This earnings expansion positions NextEra to increase its dividend 10% in the coming year, then compound at 6% annually through at least 2028. For long-term investors, this combination of earnings and dividend growth offers the potential for powerful compounding returns.

The Compelling Case for These Oil Stocks and Energy Infrastructure Plays

ConocoPhillips, Oneok, and NextEra Energy each address distinct segments of the energy value chain—from production through distribution to utility-scale renewable deployment. Yet they share a common theme: visible, multi-year growth catalysts paired with expanding dividend streams. These oil stocks and broader energy equities have the financial capacity to sustain elevated shareholder returns while navigating an evolving energy landscape.

The convergence of dividend growth and underlying business expansion creates a powerful return potential. While near-term energy sector volatility may persist, these three companies possess the operational strength, project visibility, and financial discipline to deliver robust shareholder returns over the coming years.