The war with Iran has reached a pivotal moment. President Trump issued an ultimatum late last week that Iran must reopen the Strait of Hormuz within 48 hours, or the U.S. would start destroying the country’s power plants. The President extended that deadline by five days on Monday morning following constructive dialogue with Iran over the weekend.
If those talks lead to peace, oil prices could drop significantly. However, a collapse in the talks would likely trigger a reescalation of the conflict, driving oil prices higher. Here are three energy stocks to buy amid the current uncertainty, as they should thrive no matter what happens next.
Image source: Getty Images.
Energy Transfer
Energy Transfer (ET +1.15%) is a diversified energy infrastructure company with operations spanning the U.S. It owns pipelines, processing plants, storage facilities, and export terminals that primarily operate under long-term, fixed-rate agreements. Roughly 90% of its earnings come from stable fee-based sources, limiting the impact of commodity price volatility on its earnings.
The master limited partnership (MLP) — an entity that sends investors a Schedule K-1 Federal tax form each year — plans to invest over $5 billion in commercially secured growth capital projects this year. That’s part of a multi-billion-dollar backlog of projects that should come online through 2030. Most of those projects will support growing natural gas demand, including AI data centers and liquefied natural gas (LNG) export terminals.
Energy Transfer
Today’s Change
(1.15%) $0.22
Current Price
$19.36
Key Data Points
Market Cap
$66B
Day’s Range
$19.15 – $19.39
52wk Range
$14.60 – $19.47
Volume
113K
Avg Vol
16M
Gross Margin
12.27%
Dividend Yield
6.92%
Energy Transfer’s expansion projects should drive strong earnings growth over the next several years. That supports the MLP’s plans to grow its high-yielding distribution (currently 7%) by 3% to 5% per year.
Clearway Energy
Clearway Energy (CWEN 0.01%)(CWENA 0.33%) is one of the country’s largest clean power producers. It operates wind, solar, and natural gas assets. The company sells its electricity under long-term, fixed-rate power purchase agreements with utilities and large corporations.
Clearway Energy
Today’s Change
(-0.01%) $-0.01
Current Price
$39.16
Key Data Points
Market Cap
$4.7B
Day’s Range
$38.94 – $39.50
52wk Range
$25.63 – $41.51
Volume
70K
Avg Vol
1M
Gross Margin
16.60%
Dividend Yield
4.59%
The clean power producer has clear growth visibility through the end of the decade. It has already secured $1 billion of growth investments that will enter commercial service over the next two years. Meanwhile, its parent company, renewable energy developer Clearway Energy Group (CEG), has either already offered or has the projects in its pipeline to support its affiliate’s growth in later years. This visibility drives Clearway’s outlook that it will grow its cash flow per share at a 7% to 8% annual rate through 2030. Meanwhile, Clearway expects to grow its cash flow per share at a 5% to 8%+ annual rate beyond 2030, powered by additional acquisitions from CEG, fleet enhancements, and third-party deals. As a result, it should have plenty of power to continue increasing its 4.8%-yielding dividend.
Chevron
Chevron (CVX +0.79%) might be one of the best-positioned oil companies to capitalize on this year’s spike in crude prices. The oil giant expected a combination of recently completed major expansion projects, its acquisition of Hess, and cost-saving initiatives to boost its free cash flow by $12.5 billion if oil averages $70 a barrel this year. That’s huge for a company that generated $20.2 billion in adjusted free cash flow last year. With crude prices currently well above that level, it’s on track to produce an even bigger gusher of free cash flow in 2026.
Today’s Change
(0.79%) $1.61
Current Price
$206.76
Key Data Points
Market Cap
$409B
Day’s Range
$205.16 – $207.24
52wk Range
$132.04 – $209.79
Volume
1.7M
Avg Vol
13M
Gross Margin
14.66%
Dividend Yield
3.37%
The oil giant expects to grow its free cash flow at a more than 10% compound annual rate through 2030, assuming oil averages $70 a barrel. It has several growth drivers, including new offshore oil projects in Guyana, growth projects in Venezuela, and its low-carbon energy businesses. That should support continued dividend increases (39 years and counting) and share repurchases of $10 billion to $20 billion per year. Chevron can grow its free cash flow even faster if oil is above that level.
Meanwhile, Chevron has strong downside protection if oil prices are much lower in the future. It can fund its dividend and capital program at sub-$50 oil through 2030. Chevron also has one of the strongest balance sheets in the oil sector, giving it additional flexibility to navigate lower oil prices.
Plenty of fuel to grow, no matter what happens with oil prices
Crude prices could rise or fall depending on the outcome of talks with Iran. However, even if they fall, it won’t affect the growth plans of Energy Transfer, Clearway Energy, or Chevron. That’s why I wouldn’t hesitate to buy any of these energy stocks amid the current uncertainty.