Three Best Oil Stocks to Consider for Income and Growth

The energy sector faced significant headwinds in 2025, with the average energy stock in the S&P 500 climbing just 4% compared to the broader market’s nearly 18% advance. Yet despite the sector’s recent challenges, energy remains critical to powering global economic growth. For investors seeking best oil stocks that combine reliable dividends with long-term growth potential, three companies stand out: ConocoPhillips, Oneok, and NextEra Energy. Each brings distinct strengths to the table—from cash generation to infrastructure expansion to clean energy transition plays.

ConocoPhillips: Positioning for a Cash Flow Boom

ConocoPhillips (NYSE: COP), a leading global oil and gas producer, operates one of the sector’s most cost-efficient, geographically diversified asset bases. The company requires only mid-$40s oil prices to fund operations and roughly $10 additional per barrel to sustain its current dividend. With crude trading near $60 per barrel, the company generates substantial excess cash available for shareholders.

More importantly, ConocoPhillips’ cost structure is improving materially. Following the large-scale integration of Marathon Oil assets, the company projects its breakeven price will decline steadily through the decade. The firm also expects to bring online three major liquefied natural gas facilities and the Willow project in Alaska by 2029. These developments alone should inject approximately $6 billion in incremental annual free cash flow by that year—a substantial increase from the $6.1 billion the company generated in the first nine months of 2025.

This expanding cash generation foundation gives management the flexibility to pursue aggressive shareholder returns. The company recently increased its 3.4% dividend by 8% and targets top-10% dividend growth rates within the S&P 500. Combined with planned share buybacks, this dual-return approach could deliver compelling total returns for long-term holders.

Oneok: Midstream Consolidation Unlocking Value

Oneok (NYSE: OKE) represents a fundamentally different energy exposure as one of North America’s largest midstream infrastructure operators. The pipeline and logistics specialist enjoys revenue visibility through long-term customer contracts and government-regulated rate structures—providing stability that pure upstream plays cannot match.

The company has aggressively repositioned itself through a series of transformational transactions. The 2023 acquisition of Magellan Midstream Partners expanded operations into crude oil and refined products infrastructure. Subsequent deals for Medallion Midstream and EnLink (totaling $10.2 billion across multiple closings) extended the asset base further.

Management anticipates capturing hundreds of millions in cost synergies from these integrations alongside organic expansion—including the Texas City Logistics Export Terminal and the Eiger Express Pipeline, both expected to commence operations by mid-2028. These synergies and new projects should support 3% to 4% annual dividend growth atop the current 5.6% yield—an attractive income stream with measurable upside.

NextEra Energy: The Clean Energy Growth Engine

NextEra Energy (NYSE: NEE) occupies a unique position combining traditional utility operations with renewable energy infrastructure development. Its Florida-based utility benefits from regulated rate structures that steadily increase earnings, while the broader energy resources platform captures growth from long-term contracts backing wind, solar, and transmission assets.

The company’s investment thesis centers on massive capital deployment. NextEra’s Florida utility plans to invest north of $100 billion through 2032 to address the state’s surging power demand. Simultaneously, the energy resources division is deploying billions toward transmission expansion, gas pipeline development, and clean energy infrastructure. These investments collectively should drive more than 8% compound annual earnings-per-share growth through 2035.

That growth profile supports a 10% dividend increase for 2026 and 6% annual dividend growth thereafter through at least 2028. For investors seeking exposure to energy demand growth with an environmental angle, NextEra offers a compelling blend of regulated earnings stability and infrastructure growth.

Evaluating the Three Best Oil Stocks for Your Portfolio

ConocoPhillips, Oneok, and NextEra Energy each represent distinct investment approaches within the energy sector. ConocoPhillips offers traditional commodity upside with fortress balance sheets generating surging free cash. Oneok provides infrastructure-backed stability with midstream consolidation driving growth. NextEra Energy combines utility safety with clean energy expansion tailwinds.

The common thread: all three generate cash flow sufficient to fund rising dividends while investing in long-term competitive advantages. For investors tired of the energy sector’s volatility, these best oil stocks merit consideration as core holdings combining current income with multi-year total return potential.