The Future of Energy – and How to Play It

Dividend Investing, Energy Investing

Energy. Every aspect of our lives requires some form of energy, from transportation, to the growing of food, to powering your Facebook feed. For example, the internet is forecast to soon consume one-fifth of all the world’s electricity.

The recent double whammy of pandemic restrictions and sanctions on Russia has revealed how fragile the global energy system is. European countries have had to go back to coal-fired power plants, and in the U.S., the prices of diesel and jet fuels have skyrocketed.

On May 8, The Wall Street Journal published an article covering warnings from grid operators from across the country about potential electric power shortages this summer.

The world needs more reliable energy sources, and it needs them now. Here’s why I believe natural gas will be the primary energy source for the next couple of decades…

And which companies will be the big winners as that happens.

Natural gas has several benefits, including:

  • It can be used in power plants for reliable electricity.
  • It can heat homes and buildings.
  • It is a raw material to produce chemicals, fertilizer, and hydrogen.
  • It is considered to be the cleanest of the carbon-based energy sources.
  • Natural gas infrastructure can someday easily convert to hydrogen, considered the carbon-free fuel of the future.

Furthermore, the U.S. is a leading producer of natural gas with massive reserves.

Natural gas companies can be divided into upstream producers and midstream processing, storage, and transport companies. I prefer shares of midstream companies for their more predictable revenue streams. Here are a couple of stocks to consider:

Cheniere Energy Inc. (LNG) is the largest producer of liquified natural gas (LNG) in the United States and the second-largest LNG operator in the world. LNG is the preferred form of natural gas when it’s being shipped from production areas to parts of the world in need of natural gas. Cheniere operates, constructs, and develops two LNG facilities on the U.S. Gulf Coast. These massive LNG facilities reliably and safely process billions of cubic feet of natural gas per day into LNG, which is then loaded onto insulated ships that keep the product cold for transport worldwide.

Cheniere is not a big dividend-paying stock. The company continues to reinvest free cash flow to expand its production capacity.

ONEOK Inc. (OKE) operates a large natural gas gathering, processing, storage, and transport network through the central portion of the U.S. The company owns one of the nation’s premier natural gas liquids systems, connecting NGL supply in the Rocky Mountain, Mid-Continent, and Permian regions with key market centers.

ONEOK is an attractive dividend stock. The shares currently yield 6.0%. After not growing dividends since the start of the pandemic, I expect OKE to return to dividend growth next year.

Now, ONEOK is just one of 30+ low-risk, high-yield dividend stocks I’ve personally vetted for their ability to create a lifelong income stream for you. You can get your hands on that list today – click here to learn more.