Two Oil and Gas Dividend Stocks to Consider in August

August 12, 2019
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The ongoing trade war between China and the United States has escalated in recent weeks, with President Trump implementing a new round of tariffs on America’s largest trade partner. This has led to some volatility in the market and concern for the months ahead.

With stocks being hard to read today, high dividend picks can help to boost your portfolio. Here are two of the best income-focused oil and gas stocks on the market today.

DCP Midstream L.P. (NYSE:DCP)

A specialist in the natural gas industry, DCP Midstream produces, processes, stores, and sells natural gas and propane to wholesale customers. The gas industry is still incredibly strong, with renewables and biofuels yet to have a meaningful impact on the market. DCP is a stable company, but its stock is nothing special in terms of total growth. In fact, it has declined across the board in 2019.

However, for investors focused on income, this is not such a bad thing. The stock is currently outperforming expectations and it offers a dividend yield of 12.64%.

Don’t bet your portfolio on this stock, but a small investment could make sense for the mid-term while the market is uncertain.

BP PLC (NYSE: BP)

BP is one of the world’s largest integrated gas and oil companies. It is involved in all areas of upstream and downstream. It explores for natural gas and oil, develops extraction projects, processes raw resources into usable fuels, stores, and even sells fuel at a wholesale and retail level. BP is one of the ‘old guard’ of the oil industry, and it has maintained its strength throughout the years.

That strength has resulted in revenue growth during the last two fiscal years, with 37.52% growth in 2017 and 20.12% growth in 2018. This year has been slower due to lower oil prices, but BP has the cash on hand and the management to weather any short and mid-term market problems.

With the stock price declining this year, the dividend yield has only improved. BP currently pays a $0.62 dividend for a yield of 6.62% at today’s stock price. With free cash flow of $4.62 billion in the last fiscal year, it’s expected that the dividend will be protected for the foreseeable future.

Diversify Your Investments with Dividend Stocks

A portfolio based only on stock price growth will suffer heavily during times of volatility. Dividend stocks can help to ensure a return, even when prices trend downwards.

Both BP and DCP are compelling investments for the rest of 2019. As with any decision, perform due diligence on all stock picks and consider them within the context of your entire investment portfolio.

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