All It Takes Is $2,000 Invested in Each of These 3 Dividend-Paying Energy Stocks to Help Generate Over $300 in Passive Income per Year

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Clearway Energy-C

-0.77%

Maui Land & Pineapple

Key Points

The energy sector can be a great source of dividend income. Many energy companies pay lucrative dividends backed by strong financial profiles.

For example, $2,000 invested in each of the energy dividend stocks shown in the table below would generate more than $300 of passive dividend income each year:

Dividend Stock	Investment	Current Yield	Annual Dividend Income
Clearway Energy (NYSE: CWEN)(NYSE: CWEN.A)	$2,000.00	5.52%	$110.40
Energy Transfer (NYSE: ET)	$2,000.00	7.39%	$147.80
ConocoPhillips (NYSE: COP)	$2,000.00	3.26%	$65.20
Total	$6,000.00	5.39%	$323.40

Data source: Google Finance and author's calculations. Note: Dividend yields as of July 25, 2025.

Here's a closer look at what makes these energy stocks excellent sources of passive income.

Clearway Energy

Clearway Energy is a major U.S. clean power producer with a portfolio that includes wind, solar, storage, and natural gas assets. It sells its electricity under long-term power purchase agreements, which provide steady sources of cash flow for its high-yield dividend.

The company generates a growing amount of excess free cash flow after paying dividends, which it reinvests in new income-generating clean power assets. Clearway's current slate of renewable energy investments has it on track to grow its cash available for dividends from $2.08 per share this year to more than $2.50 per share by 2027. The growing cash flow should support dividend growth of 5% to 8% annually.

Given the robust demand for renewable energy, Clearway has a clear path to continue growing its cash flow and dividends within that target range well beyond 2027.

Energy Transfer

Energy Transfer is a leading energy infrastructure company. It focuses on gathering, processing, transporting, storing, and exporting hydrocarbons. The company's midstream operations generate fairly stable cash flow, as 90% of its earnings come from predictable fee-based sources. The master limited partnership (MLP), which sends investors a Schedule K-1 Federal Tax Form each year, distributes about half its stable cash flow to investors.

The midstream giant uses its retained cash flow to invest in organic expansion projects and make accretive acquisitions. Energy Transfer expects to invest about $5 billion this year across new gas processing plants, additional export capacity, and a major new gas pipeline.

These projects will provide incremental cash flow as they enter service over the next two years, supporting the MLP's plan to increase its distribution by around 3% to 5% per year. Energy Transfer also has additional expansion projects in development and ample financial capacity to make acquisitions as opportunities arise, supporting its continued growth.

ConocoPhillips

ConocoPhillips is one of the country's largest and lowest-cost oil and gas producers. It has built a deep, durable, and diversified portfolio with decades of inventory, boasting a cost of supply below $40 a barrel. With crude oil currently in the upper $60s, ConocoPhillips is generating a lot of free cash flow.

The oil giant is entering a multiyear free-cash-flow growth cycle. ConocoPhillips' investments in expanding its production in Alaska and its global liquefied natural gas (LNG) business have it on track to deliver $6 billion of incremental free cash flow through 2029, giving it a sector-leading free-cash-flow growth profile. That growing free cash flow should enable the company to achieve its target of delivering dividend growth in the top 25% of companies in the S&P 500.

Income-producing machines

Clearway Energy, Energy Transfer, and ConocoPhillips generate significant cash flow, which they use to pay dividends and invest in expanding their operations. These growth investments increase their cash flow, enabling them to raise their already lucrative dividend payments. Their combination of yield and growth makes these energy stocks top buys for those seeking to generate substantial passive dividend income each year.

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Matt DiLallo has positions in Clearway Energy, ConocoPhillips, and Energy Transfer. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

All It Takes Is $2,000 Invested in Each of These 3 Dividend-Paying Energy Stocks to Help Generate Over $300 in Passive Income per Year was originally published by The Motley Fool

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Clearway Energy Is Maintained at Buy by Jefferies

Dow Jones Newswires

(21:15 GMT) Clearway Energy Price Target Raised to $39.00/Share From $37.00 by Jefferies

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Sector Update: Energy Stocks Decline in Afternoon Trading

MT Newswires

Energy stocks fell Monday afternoon with the NYSE Energy Sector Index dropping 0.4% and the Energy Select Sector SPDR Fund (XLE) shedding 0.6%.

The Philadelphia Oil Service Sector Index eased 0.1%, and the Dow Jones US Utilities Index gained 0.4%.

West Texas Intermediate crude oil declined 0.2% to $67.19 a barrel, and global benchmark Brent shed 0.4% to $69.03 a barrel. Henry Hub natural gas futures slumped 7.4% to $3.30 per 1 million BTU.

In corporate news, Clearway Energy shares fell 0.4% after CIBC downgraded the stock to neutral from outperform.

BP shareholder and activist investor Elliott Investment Management urged the oil company's new chairman to fix its high costs and the way it allocates capital, Bloomberg reported. BP shares rose 1.1%.

Eco Wave Power Global shares jumped 16% after the company signed an agreement with C&S Welding to install its wave energy floaters and energy conversion unit at the Port of Los Angeles.

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Sector Update: Energy

MT Newswires

Energy stocks were lower Monday afternoon, with the NYSE Energy Sector Index down 0.3% and the Energy Select Sector SPDR Fund (XLE) shedding 0.5%.

The Philadelphia Oil Service Sector index was gaining 0.2%, and the Dow Jones US Utilities index was up 0.6%.

Front-month West Texas Intermediate crude oil was declining 0.2% to $67.19 a barrel, and the global benchmark Brent crude contract was shedding 0.4% to $69.03 a barrel. Henry Hub natural gas futures fell 7% to $3.31 per 1 million BTU.

In corporate news, Clearway Energy shares eased 0.2% after CIBC downgraded the stock to neutral from outperform.

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Clearway Energy Cut to Neutral From Outperformer by CIBC

Dow Jones Newswires

(15:14 GMT) Clearway Energy Price Target Announced at $35.00/Share by CIBC

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CIBC Downgrades Clearway Energy to Neutral From Outperform, $35 Price Target

MT Newswires

Clearway Energy has an average rating of Buy and mean price target of $35.73, according to analysts polled by FactSet.

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5 Top Dividend Stocks Yielding 5% or More to Buy Right Now for Passive Income

Motley Fool

Healthpeak Properties

-0.36%

Key Points

The S&P 500's (SNPINDEX: ^GSPC) dividend yield is approaching record lows at around 1.2%. However, that doesn't mean passive income seekers are out of luck. Several high-quality companies currently offer dividends with yields of 5% or more.

Here's a look at five top to buy for right now.

1. Realty Income

Realty Income (NYSE: O) currently has a dividend yield above 5.5%. The real estate investment trust (REIT) backs that payout with a high-quality real estate portfolio and financial profile.

The company owns a diversified portfolio (retail, industrial, gaming, and other properties) net leased to many of the world's leading companies. Net leases produce very stable rental income because tenants cover all property operating expenses, including building insurance, real estate taxes, and routine maintenance.

The REIT has an exceptional record of paying dividends. It has declared 661 consecutive monthly dividends since its formation. Meanwhile, Realty Income has increased its dividend 131 times since its initial public listing in 1994. It has raised its payout 111 straight quarters and for 30 years in a row.

With a durable portfolio and fortress financial profile, Realty Income should have no trouble continuing to increase its high-yielding dividend in the future.

2. Clearway Energy

Clearway Energy (NYSE: CWEN.A) (NYSE: CWEN) has a dividend yield currently just below 5.5%. The clean power producer generates lots of stable cash flow to cover its dividend by selling electricity to utilities and large corporate customers under long-term, fixed-rate power purchase agreements.

The company uses its financial flexibility to invest in additional income-generating clean energy assets. Clearway has lined up several new investments that it expects to close over the next few years. That gives it a clear line of sight to grow its cash available for dividends from $2.08 per share this year to over $2.50 per share by 2027. That supports the company's plan to increase its high-yielding payout within its 5% to 8% annual target range.

3. Healthpeak Properties

Healthpeak Properties (NYSE: DOC) yield is over 6.5%. The healthcare REIT has recently switched to a monthly dividend payment schedule, making it an ideal choice for those seeking to generate passive income. It backs its payout with a high-quality portfolio of healthcare properties (outpatient medical buildings, purpose-built labs, and senior housing communities).

The healthcare REIT's portfolio produces stable and growing income to support its high-yielding dividend. Healthpeak also has a very strong financial profile, featuring a conservative dividend payout ratio and investment-grade balance sheet. It currently has $500 million to $1 billion of capacity on its balance sheet to support additional accretive investments and opportunistic share repurchases. As the REIT utilizes its spare investment capacity to grow its cash flow per share, it will be able to continue increasing its healthy dividend.

4. Oneok

Oneok's (NYSE: OKE) dividend yield exceeds 5%. The energy infrastructure company backs that payout with very stable cash flows. About 90% of its earnings come from fee-based sources.

Its stable cash flow profile has enabled Oneok to deliver more than a quarter-century of dividend stability and growth. While the pipeline giant hasn't increased its payout every year, it has nearly doubled its dividend payment over the past decade.

The midstream giant aims to increase its high-yielding dividend by 3% to 4% annually over the coming years. Fueling that growth will be a combination of acquisition synergies and expansion projects. Oneok has made several deals over the past few years, including closing its merger with EnLink earlier this year, that will boost its bottom line as it captures cost savings and new commercial opportunities. Additionally, Oneok has several organic expansion projects under construction, including a joint venture to build a new export terminal that should come online in early 2028.

5. Verizon

Verizon (NYSE: VZ) has a dividend yield approaching 6.5%. The telecom giant generates lots of recurring cash flow as customers pay their wireless and broadband bills. Last year, Verizon generated $19.8 billion in free cash flow after funding $17.1 billion in capital expenditures to expand its 5G and fiber networks. That easily covered its $11.2 billion in dividend payments to shareholders, enabling the company to retain cash to strengthen its already rock-solid balance sheet.

The company's free cash flow should grow over the long term as its capital investments expand its network (and revenue) and it closes its accretive acquisition of Frontier Communications. That should enable Verizon to continue increasing its dividend. Last year, it delivered its 18th consecutive annual dividend increase, the longest current streak in the U.S. telecom sector.

Top-notch passive income stocks

Realty Income, Clearway Energy, Healthpeak Properties, Oneok, and Verizon all pay dividends with yields above 5%, backed by recurring cash flow and strong balance sheets. Those factors put their high-yielding payouts on rock-solid ground and enable them to invest in growing their businesses, which supports dividend growth. That makes them great stocks to buy and hold to generate passive income.

Should you invest $1,000 in Realty Income right now?

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Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $671,477!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,010,880!*

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Matt DiLallo has positions in Clearway Energy, Realty Income, and Verizon Communications. The Motley Fool has positions in and recommends Realty Income. The Motley Fool recommends Healthpeak Properties, Oneok, and Verizon Communications. The Motley Fool has a disclosure policy.

5 Top Dividend Stocks Yielding 5% or More to Buy Right Now for Passive Income was originally published by The Motley Fool

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