3 of the Best Energy Stocks to Buy Right Now

Key Points
Chevron stands to benefit greatly from its aggressive production expansion and cost-cutting plans.
Energy Transfer is positioned to remain a high-yielding midstream energy stock.
Pursuing a similar approach to competitor Chevron, ExxonMobil is capitalizing on favorable industry trends the right way.
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With crude oil prices surging over $100 per barrel, energy stocks are once again top of mind among investors. So, what's the best approach?
I would focus on more conservative plays that also capitalize on the trend. By focusing on stability, particularly when it comes to dividends, you can add several names to your portfolio that capture the upside from another oil and gas boom while limiting downside risk.
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Among major energy stocks, the following three meet these criteria: Chevron (NYSE: CVX), Energy Transfer LP (NYSE: ET), and ExxonMobil (NYSE: XOM).
High energy prices bolster the Chevron bull case
Over the past year, Chevron has implemented a shareholder-friendly strategy shift. For 2026, Chevron expects to increase its total production by 7% to 10%. It's also continuing to reduce operating expenses through layoffs and other cost-cutting measures.
By tackling both at the same time, Chevron could become far more profitable. Now, with oil's unexpected surge, this potential upside has kept climbing. This explains why Chevron has rallied by nearly 30% year to date.
Currently, Chevron has a 3.6% forward dividend yield and a nearly 40-year track record of dividend growth. Although pricey at 25.6 times estimated 2026 earnings, remember that analyst forecasts range widely, with some analysts saying Chevron's earnings could rise more than 80% from 2025 levels.
Energy Transfer is poised to stay a high-yielder
Energy Transfer owns and operates midstream oil and gas assets, including pipelines, across North America. Given its large scale, Energy Transfer generates substantial earnings. As a master limited partnership (MLP), it pays out most of its earnings to shareholders through distributions.
The MLP's earnings distribution policy gives the stock a forward yield of 7.1%. Energy Transfer doesn't have a long dividend-growth track record, but it anticipates steady earnings and distribution growth over the next few years.
Energy Transfer is confident that a few ongoing projects, namely the Hugh Brinson Pipeline, will help to drive 3% to 5% annual distribution growth. Such steady growth could lead to similarly sized capital appreciation for this pipeline stock.
ExxonMobil is also capitalizing on the latest oil price spike
ExxonMobil laid out its latest corporate plan in December, upping its estimated cost savings from the acquisition of Pioneer Natural Resources from $2 billion to $3 billion.
ExxonMobil, like rival Chevron, has also increased production and has continued to identify new structural cost-savings opportunities. All these positives come atop other key positives with ExxonMobil, such as the company's commitment to return-of-capital efforts. Last year, the company bought back $20 billion worth of shares, all while growing its quarterly dividend.
Currently, ExxonMobil has a 2.6% forward dividend yield and a 43-year track record of dividend growth. Although seemingly pricey at 21 times forward earnings, keep in mind that, like Chevron, the recent rise in oil and gas prices could result in substantially higher earnings this year.
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Thomas Niel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Chevron. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.