5 Buy-Ranked Energy Stocks For Dividend Investors In 2020

2020 Expected to be a Tumultuous Year for Energy Investors

There are too many variables to make an educated guess as to the price of oil and natural gas going forward. In fact, more wild market swings appear imminent in 2020.

With oil, conflicting economic data and geopolitical issues may lead to increased volatility in the markets. As we found out with the recent U.S.-Iran standoff, prices rallied to multi-month highs, pushed up by concerns that escalating tensions in the Middle East could lead to supply disruptions, only to spiral downward again when sentiment shifted.

On the other hand, natural gas might experience short-lived surge based on positive weather forecasts but any powerful turnaround looks unlikely at the moment. With gas output in the lower 48 states recently hitting a record 92.8 Bcf per day, there is little room for prices to improve meaningfully from their current levels of $2.13 per MMBtu.

As evident from the energy market story, stocks can take a sudden turn for the good (or bad), making stock picking a risky game. Every good stock also has its bad day, which further adds to the risk.

Dividend Investing to the Rescue

With uncertainty ruling the markets, it is not surprising that dividend investing has emerged as one of the most popular investing themes.

Dividend stocks are always the investors’ preferred choice as they provide steady income and cushion against market risks. These stocks – displaying solid financial structure and healthy underlying fundamentals – are generally less volatile in nature and hence, are dependable when it comes to long-term investment planning. Moreover, they are proven outperformers over the long term and a safe bet to create wealth while offering sizable yields on a regular basis.

How to Pick the Best Stocks?

Although the benefits of dividend investing cannot be stressed enough, one should keep in mind that not every company can keep up with its dividend paying momentum. Hence, a cautious strategy needs to be followed in order to select the best dividend stocks with potential for steady returns.

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