In recent years, the rapid advancements in the cloud, artificial intelligence (AI), and data center industries have surpassed the growth of global energy supply, causing a worldwide energy deficit. Geopolitical tensions, tariffs, and sanctions have intensified this issue.
To take advantage of this trend, investors should consider a few well-managed energy firms that offer substantial dividends and distributions. Let’s explore two promising energy stocks for income generation: Chevron (CVX +0.69%) and Enterprise Products Partners (EPD +0.37%), and understand how they could support investors’ retirement plans over the coming decades.
Chevron
Chevron ranks among the largest integrated companies globally, recognized as a classic dividend stock with a forward yield of 3.6%. It has consistently increased its dividends for 39 years and provides both upstream and downstream services, producing chemicals, plastics, and industrial materials.
Chevron primarily sources its oil and natural gas from the U.S., Kazakhstan, and Australia, making it less vulnerable to Middle Eastern conflicts than many of its competitors. Rising oil prices are set to enhance its upstream returns, thereby generating increased cash for dividend payments, share buybacks, and improving the financial viability of its extensive projects.
Between 2025 and 2028, analysts estimate Chevron’s earnings per share (EPS) will grow at a compound annual growth rate (CAGR) of 16%. This growth is expected to be driven by the expansion of the Tengiz Field in Kazakhstan and the enhancement of its primary oil field in the Permian Basin, both aimed at producing approximately 1 million barrels of oil daily.
Enterprise Products Partners
Enterprise Products Partners operates more than 50,000 miles of pipeline across 27 states, employing a “toll road” business model that charges upstream and downstream companies for oil, natural gas, and related product transport. This model provides resilience against fluctuations in commodity prices, while simultaneously benefiting from the increasing demand for oil and natural gas.
As a master limited partnership (MLP), Enterprise Products offers tax-efficient distributions instead of standard dividends, requiring a separate K-1 tax form annually. With a forward yield of 5.8%, the company has raised its distributions annually for 28 consecutive years. Its operational distributable cash flow (DCF) of $7.9 billion last year significantly exceeded the $4.8 billion in distributions, allowing for future increases.
From 2025 to 2028, analysts project an 8% CAGR in Enterprise Products’ earnings per unit (EPU), driven by expanding pipelines in resource-dense regions like the Permian Basin. Priced at $38, its stock appears reasonably valued at 12 times next year’s EPU, making it an appealing investment for those wary of volatile commodity markets.
