Oil Stocks: Long-Term Opportunities Amidst Current Volatility

Energy is vital to the modern world, yet the oil market remains a highly volatile commodity landscape. Recently, oil prices have come under pressure, which has led to declining prices for oil-related stocks. This downturn, however, may present a buying opportunity for long-term investors, as history has shown that oil prices rebound over time. For investors looking to invest $1,000 or more today, three strong high-yield stocks to consider are Chevron (NYSE: CVX), TotalEnergies (NYSE: TTE), and Enbridge (NYSE: ENB). Below, we delve into the appeal of each of these oil stocks.

1. Chevron: A Strong Through-the-Cycle Energy Pick

Chevron is a leading player in the energy sector and should be a consideration for anyone looking to invest in oil. As one of the largest integrated energy majors, Chevron operates across the entire spectrum of the energy industry—from upstream oil and natural gas production to midstream pipeline services to downstream chemicals and refining. This diversification helps to mitigate the impact of commodity price volatility.

The company boasts a strong balance sheet, reflected in its low debt-to-equity ratio of approximately 0.2 as of the first quarter of 2025. This low leverage indicates that Chevron is well-positioned to navigate industry downturns, allowing it to support its business and dividend payouts even in challenging times.

While Chevron faces some unique challenges—such as navigating a difficult merger and dealing with complications in Venezuela—it continues to provide a sturdy investment option with a yield of around 5%. Its strong foundational structure and historical resilience make it a strong candidate for long-term investors.

2. TotalEnergies: A Hedged Bet Towards a Cleaner Future

TotalEnergies is a French integrated energy giant that shares some diversification characteristics with Chevron but stands out due to its significant investments in clean energy. In 2020, the company committed to shifting towards renewable energy, a move not mirrored by some of its peers like BP and Shell, who cut dividends during similar transitions.

Unlike these competitors, TotalEnergies has continually prioritized dividend stability while expanding its commitment to clean energy. In fact, the clean energy segment grew by 17% in 2024, demonstrating the company’s strong alignment with future energy trends.

For investors seeking oil exposure but harboring concerns about the ongoing transition to cleaner energy, TotalEnergies offers a unique blend of high yield, currently at around 6.5%, while retaining core oil and natural gas operations. This makes the stock an attractive consideration, particularly for more conservative investors focused on long-term growth potential.

3. Enbridge: Sidestepping Oil Price Volatility

Unlike Chevron and TotalEnergies, Enbridge is primarily a midstream company, owning crucial infrastructure such as pipelines, storage facilities, processing, and transportation assets. This business model allows Enbridge to earn consistent income through the charging of fees for its asset use, making it less susceptible to fluctuations in oil prices.

Approximately 50% of Enbridge’s earnings come from oil pipelines, while 25% stems from natural gas pipelines. The remaining portion includes investments in natural gas utilities and clean energy, aligning with the evolving energy landscape. This diversified approach results in dependable cash flows, akin to the predictability seen in their fee-based pipeline operations.

Enbridge offers a reliable dividend yield of about 5.8%, making it an appealing option for investors wanting energy exposure without taking on significant commodity risk.

Conclusion: Why Investing in Oil Still Matters

Despite the global transition toward cleaner energy, oil remains an essential power source for the world, alongside natural gas. Companies like Chevron provide direct exposure to traditional energy markets while maintaining a robust financial structure. TotalEnergies adds the dimension of clean energy investments without sacrificing yield. Enbridge, on the other hand, offers a way to engage in energy markets through a less risky, fee-based model.

For investors looking to capitalize on the current market conditions, exploring these high-yield oil stocks could prove to be a prudent move. Each of these companies presents unique advantages, making them suitable candidates for your investment portfolio today.