Fears of a softening world economy and stronger U.S. dollar have led to recent weakness in the oil sector. This has forced momentum traders to hit the exits but income investors can take advantage of lower share prices to generate higher yields. Even so, its more important than ever to stick with dividend stocks backed by strong and stable fundamentals.
Oil giants Chevron (CVX) and Exxon Mobil (XOM), two of the energy sector’s best-known names, have seen their yields climb over the past few weeks.
Dividend Stocks Raise Yields As Share Prices Weaken
Chevron was the focus of Income Investor just three weeks ago.
At that time, the stock was coming off a mixed earnings report, a dividend raise and a controversial $75 billion share buyback announcement. The dividend yield stood at 3.26% at the time but share prices have weakened and Chevron now yields a more impressive 3.75%.
While Chevron and other dividend stocks are sensitive to fluctuations in oil prices, the company’s balance sheet remains rock-solid, with an “AA-” bond rating from S&P Global. It also boasts 36 straight years of dividend increases.
But now is not the ideal time to buy because shares recently broke down from a base and are now trading below both the 50- and 200-day moving averages. Nevertheless, if share price continues to fall, investors will be looking at a solid company with a sizable 4% yield very soon.
Exxon Boasts 41 Years Of Dividend Increases
Dividend stock Exxon Mobil has been fairing well recently. The stock hit a buy point on Jan. 26 but has gone sideways since beating Q4 2022 top and bottom line estimates on Jan 31.
Shares have traded poorly so far this week but are still hanging onto support at the 50-day line. So a bounce here could provide a nice entry point.
Exxon currently sports a 3.27% dividend yield and has boosted the payout for 41 straight years.
With stable operations and long track records of increasing yields, Chevron and Exxon dividend stocks offer conservative plays in the energy sector. Both businesses are well-run and offer stable dividends but share prices will continue to be largely dependent on energy market volatility.
YOU MAY ALSO LIKE:
Why This IBD Tool Simplifies The Search For Top Stocks
Catch The Next Big Winning Stock With MarketSmith
Want To Get Quick Profits And Avoid Big Losses? Try SwingTrader
IBD Digital: Unlock IBD’s Premium Stock Lists, Tools And Analysis Today
The post Best Dividend Stocks: Chevron And Exxon Offer Stable Yields In Volatile Sector appeared first on Investor’s Business Daily.