If you are looking to weather the current economic problems that seem to be plaguing the world today, it is important to remember that your investment portfolio should be properly diversified. While this does not guarantee a positive return every year, it does put you in a position to realize gains in the long term.
That is why you will want to take a look at your investments in the energy sector. This is an industry that has traditionally been less susceptible to economic downturns due to the fact that individuals and businesses always use energy. You will want to take a look at the following four energy stocks and determine if any of them are for you.
Phillips 66 Partners
Phillips 66 just came off a great year, so you might be wondering if it is worth trying to get in on it this year or not. The reality is that they are positioned to continue doing well. They own a series of pipelines, refineries, and various storage facilities around the country. Phillips 66 and its partners will continue to reap the benefits of this. They also have a dividend yield of 5.7 percent, which is quite impressive.
Enterprise Products Partners
Here is a company that is actually five times as valuable as that of Phillips 66 Partners. This means that it is considered to be a safer investment from a long-term perspective. One of the more appealing components of this company is that it owns in excess of 19,000 miles of pipelines that carry natural gas.
Beyond that, Enterprise Products Partners also possess some 5,300 miles of pipelines that carry crude oil. Despite all of this, it is only trading at 13 times its current earnings. This means that investors today should reap some good benefits in the future.
On its surface, this is a risky stock to invest in. It went down in value more than 37 percent in 2019, which means that 2020 is almost sure to be a disastrous year when it is all done and dusted. At the same time, the company has been attracting some new capital and a long-term business plan that appears to be working. It has a dividend yield of 8.2 percent, so patient investors could do well here.
Chevron is a well-known company, and that means something in the energy sector. This is a company that has sustained the ups and downs of the business and has still managed to come out on top. It has no plans of going anywhere, which makes it great if you are looking to invest in energy stocks. It continues to grow and it has a multi-decades history of paying out dividends. All of this points to a good future if you choose to invest now.
Pros and Cons of Investing in Energy Stocks
There is always a certain amount of controversy when it comes to investing in energy companies. There are environmental considerations to take into account. At the same time, energy is necessary to keep the world moving. This makes solid companies with a focused plan of growth worth investing in. The sector as a whole is risky, so more research needs to be done than usual when you are looking to invest in any one company.
It is always important to determine your own risk tolerance when investing in any stock. These are uncertain times, so nothing is a guarantee. At the same time, you will want to begin now to look for those stocks that are currently undervalued and primed to increase once the world situation clears up a bit. That is when you want to be there to reap the benefits.