2 Ultra-High-Yield Energy Stocks to Buy Hand Over Fist and 1 to Avoid
The world is looking to shift toward clean energy sources, but it can't easily move away from oil and natural gas. It will likely be decades before these fuels start to see meaningful demand declines. That said, they are commodities prone to material and dramatic price moves.
So if you are a dividend investor looking to own a high-yield energy company, you need to balance risk and reward in a unique way. Enbridge (NYSE: ENB) and Magellan Midstream Partners (NYSE: MMP) are two midstream companies that have reliable dividends and fat yields. Pioneer Natural Resources (NYSE: PXD) has a huge yield today, but "reliable" is not a good way to describe the dividend. Let's explore why the first two stocks might be worth buying hand over fist and the third might be one to avoid.
Oil and natural gas are commodities where the price is based on supply and demand. Right now prices are fairly high because demand is outstripping supply. Not too long ago, during the early days of 2020 when coronavirus pandemic fears led to a severe drop in demand, the industry was crippled by low prices. Swings like this seem shocking in the short term, but they are fairly commonplace over the long term.
Source Fool.com
