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The oil/energy market has been highly volatile, recently dropping below $70 per barrel. Concerns over weaker global demand, lackluster Chinese economic stimulus, and a surging U.S. dollar have weighed on market sentiment.

On Thursday, Brent crude settled at $74.23 a barrel, while WTI finished at $70.10 — both still down on a year-to-date basis. Analysts warn that the planned production increases of OPEC+ could further depress prices, despite geopolitical uncertainties.

High-Yield Stocks: A Cushion for Investors

In times of oil market instability, high-yield large-cap stocks — defined as companies with a market capitalization of $10 billion or more — can provide a haven for investors seeking stable returns. These stocks often offer attractive dividends, offsetting losses from commodity fluctuations. With their proven resilience and steady cash flow, they can mitigate market risks, ensuring a more balanced portfolio during volatile periods.

Canadian Natural Resources Limited (CNQ - Free Report), Chevron (CVX - Free Report), and Kinder Morgan (KMI - Free Report) stand out as compelling choices for investors seeking large-cap energy exposure.

Canadian Natural Resources, Chevron, and Kinder Morgan Dividend Yield

Image Source: Zacks Investment Research

Why Size Matters

These companies are financially strong, well-regarded, and widely covered by analysts. Their regular dividend payments make them particularly attractive to income-focused investors. For those seeking stability and a proven track record, large-cap firms may hold strong appeal.

Although large-cap stocks may not match the growth potential of smaller companies, they can offer greater price stability. This makes them an ideal choice for a steady approach without the sharp fluctuations often tied to commodity prices.

Our Choices

Here is a brief look at the above-mentioned stocks.

Canadian Natural Resources

Canadian Natural Resources Limited is one of the largest independent energy companies in Canada. The company is engaged in the exploration, development, and production of oil and natural gas. Canadian Natural Resources boasts a diversified portfolio of crude oil (heavy as well as light), natural gas, bitumen, and synthetic crude oil.

The Calgary-based company beat the Zacks Consensus Estimate for earnings in three of the last four quarters, the average being 3.9%. Canadian Natural Resources has a market capitalization of roughly $71.3 billion.

A major incentive for holding the stock is its dividend. With a quarterly payout of 56.25 Canadian cents, Canadian Natural Resources shares currently yield 4.5% annually, well above the Zacks Oil/Energy sector average of 3.7%. Reflecting a shareholder-friendly nature, the Zacks Rank #3 (Hold) company recently hiked its payout by 7%.

Chevron

Based in San Ramon, CA, Chevron is one of the largest publicly traded oil and gas companies in the world, which participates in every aspect related to energy — from oil production to refining and marketing.

Chevron beat the Zacks Consensus Estimate for earnings in three of the last four quarters. The Zacks Rank #3 (Hold) company has a market capitalization of roughly $289.9 billion.

With a quarterly payout of $1.63 per share, the stock has a 4% dividend yield, which is above the generous sector average and significantly over the S&P 500’s 1.2% average.

Kinder Morgan

Houston, TX-based Kinder Morgan is a leading midstream energy infrastructure provider in North America. The company operates pipelines across 83,000 miles to transport natural gas, crude oil, condensate, refined petroleum products, CO2, and other products.

Kinder Morgan, carrying a Zacks Rank of #3 (Hold), is valued at some $62.2 billion. The energy infrastructure provider‘s 2024 earnings per share indicate 9.4% year-over-year growth.

The stock pays out a quarterly dividend of 28.75 cents, which gives it a 4% yield at the recent stock price.

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