The Best Natural Gas Stocks With Dividends

Are you looking for the best natural gas stocks with dividends?

Back in May, I told you that natural gas may turn out to be a surprise underdog investment this year. Truth is, natural gas has been off of Wall Street’s radar for so long that I’ll bet most individual investors have written it off entirely. 

I can’t say I blame them, either. 

We’ve all started to take our natural gas wealth for granted, you can be sure of that. I’ll bet that most people don’t remember the days when our natural gas output was lackluster. Our domestic gas production languished for more than 40 years after our domestic output reached around 22.6 trillion cubic feet in 1973!

Things had gotten so bad that our natural gas imports had swelled to 4.6 trillion cubic feet in 2007. The veteran members of our investment community might remember those days, as well as the stunning reversal of fortune brought to us by the shale revolution. 

You know just as well as I do how this story turned once drillers started tapping into massive plays like the Barnett and Marcellus shales. Within 10 years, the entire game changed as our gas production soared to new records. 

The Best Natural Gas Stocks With Dividends

Last year, the United States’ marketed natural gas production was nearly 41.3 trillion cubic feet of natural gas — more than double the amount we were extracting since the shale boom took off. 

Unfortunately, that natural gas fortune created one helluva supply glut that has absolutely decimated prices. To put a little perspective on this, the U.S. consumed around 32.5 trillion cubic feet of natural gas in 2023. 

But before you dismiss this underdog investment altogether, you may want to take a look at WHY things are not only starting to turn around, but certain dividend-paying stocks are worth a deeper look by investors. 

There are two parts to the demand picture…

Look, I probably don’t need to tell you that last month was a hot one. The heatwave that settled across the midwest and eastern part of the United States in June caused a surge in electrical demand. We’re talking about more than simply beating the five-year average for electricity demand, we saw more than 20 heat records broken along the East Coast. 

Whether they realize it or not, Americans turn to natural gas the most when they pump those A/C units to keep things cool; natural gas accounted for 42% of our electric power sector in 2023. 

Naturally, the other part of the demand picture lies in LNG. It turns out that we’re not the only ones that are hungry for U.S. gas — there’s a reason why we were the world’s largest LNG export in 2023, with the U.S. currently holding an export capacity of around 14 billion cubic feet per day. 

I’ll note that the current pause on LNG projects by the Biden administration is holding back further export growth, which other countries like Qatar are taking full advantage of.

The bearish sentiment in the natural gas market may not be as strong as you might first think. 

Watching prices at the Henry Hub crater with an unstoppable amount of production growth over the years hasn’t been easy. And it’s even harder seeing most natural gas producers getting hit. 

Are we about to see a turnaround? Possibly.

In response to the dirt cheap price environment, major producers like EQT pledged in March to cut production by about a billion cubic feet per day. That may not be the straw that breaks the camel’s back, but I also want you to consider something else — the other source of our natural gas supply.

One of the biggest sources for the natural gas we use today comes as a byproduct of oil production. Since U.S. oil output surged higher in 2023, it threw a lot of new supply into the mix. Now keep in mind that U.S. oil production growth has flattened considerably in 2024. 

That naturally leads investors to ask where those opportunities lie in the natural gas sector. 

Fortunately, there are still strong natural gas stocks paying out solid dividends. 

If you’re looking to take advantage of the producers, Chevron (NYSE: CVX) is a good start. Chevron is one of the top natural gas producers in the world, and currently yields over 4% annually.

Looking at more than just producers, Kinder Morgan Inc. (NYSE: KMI) yields 5.8% and controls more than 70,000 miles of natural gas pipelines, which transports roughly 40% of all gas consumed in the United States. 

Then we have the LNG exporters. Players like Cheniere Energy Partners (NYSE: CQP) run the Sabine Pass LNG facility that was the first out of the gate when the U.S. decided it wanted to send its LNG abroad. Cheniere Energy Partners is even paying out a nearly 8% annual yield for its investors. 

Until next time,

Keith Kohl

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A true insider in the technology and energy markets, Keith’s research has helped everyday investors capitalize from the rapid adoption of new technology trends and energy transitions. Keith connects with hundreds of thousands of readers as the Managing Editor of Energy & Capital, as well as the investment director of Angel Publishing’s Energy Investor and Technology and Opportunity.

For nearly two decades, Keith has been providing in-depth coverage of the hottest investment trends before they go mainstream — from the shale oil and gas boom in the United States to the red-hot EV revolution currently underway. Keith and his readers have banked hundreds of winning trades on the 5G rollout and on key advancements in robotics and AI technology.

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