Three Oil and Gas Stocks Positioned for Strong Growth in 2026

The energy sector has experienced a muted performance over the past year, with the average energy stock in the S&P 500 rising just 4% compared to the broader market’s nearly 18% advance. However, despite recent headwinds from lower oil prices, the fundamental demand for energy remains robust. For investors seeking exposure to the oil and gas sector, this period of undervaluation presents an opportunity to acquire quality companies with visible growth catalysts ahead. Here are three compelling oil and gas stocks to consider that combine dividend income with meaningful long-term appreciation potential.

ConocoPhillips: Converting Cost Advantages into Cash Generation

ConocoPhillips (NYSE: COP) stands as a leading oil and gas producer with one of the industry’s lowest cost structures and most geographically diversified asset bases. The company currently operates profitably at mid-$40s oil prices, with its dividend supported by $10 higher per barrel—leaving substantial room for cash generation at current price levels.

The transformational 2024 acquisition of Marathon Oil is reshaping ConocoPhillips’ competitive position. Management expects the company’s breakeven economics to steadily decline as integration cost savings materialize over the next several years. More significantly, three major liquefied natural gas development projects and the Willow Alaska project should reach full production by 2029, creating an incremental $6 billion in annual free cash flow at assumed $60 oil prices. This compares meaningfully to the $6.1 billion in free cash flow generated through the first nine months of 2025.

This expanding cash generation capability provides management with ample resources to pursue its stated dividend growth objective—maintaining payouts in the top 10% of S&P 500 growth rates—while continuing share repurchases. For investors, ConocoPhillips’ combination of near-term cash returns and long-term capital appreciation sets the stage for robust total returns through the balance of the decade.

Oneok: Profiting from Energy Infrastructure Consolidation

Oneok (NYSE: OKE) operates as one of America’s largest energy midstream platforms, generating highly predictable cash flows from long-term, government-regulated contracts. This financial stability supports the company’s attractive 5.6% dividend yield.

The past three years have featured aggressive strategic acquisitions that have meaningfully expanded Oneok’s addressable market. The 2023 acquisition of Magellan Midstream Partners enhanced crude oil and refined products capabilities, while 2024-2025 acquisitions of Medallion Midstream and controlling interests in EnLink added complementary assets worth approximately $10.2 billion in combined transaction value. These deals are expected to generate hundreds of millions in annual cost synergies and operational improvements.

Beyond acquisition-driven growth, Oneok has greenlit several organic infrastructure projects including the Texas City Logistics Export Terminal and the Eiger Express Pipeline, both projected to enter service by mid-2028. These expansion initiatives, combined with synergy realization, position Oneok to increase its already-generous dividend by 3-4% annually. This dividend growth profile, paired with the underlying yield, could deliver attractive capital appreciation for income-focused investors.

NextEra Energy: Scaling Through Disciplined Infrastructure Investment

NextEra Energy (NYSE: NEE) combines a rate-regulated Florida utility with a growing energy resources platform focused on renewable infrastructure and power transmission. Both segments produce stable, long-term contracted earnings backed by regulatory cost-of-capital structures.

The company’s growth strategy centers on substantial capital deployment. NextEra’s Florida utility plans to invest more than $100 billion through 2032 to accommodate the state’s rising electricity demand, while the energy resources segment simultaneously pursues billions in transmission line expansion, pipeline development, and clean power project construction. Management projects these investments will drive compound annual earnings-per-share growth exceeding 8% throughout the 2026-2036 period.

This earnings power supports NextEra’s declared intent to grow dividends 10% next year and then at a 6% compound annual rate through at least 2028. For growth-oriented income investors, NextEra Energy’s combination of stable utility earnings plus renewable energy upside creates a compelling risk-reward profile heading into the latter half of the decade.

Building a Strategic Energy Portfolio

Each of these three oil and gas stocks addresses a different aspect of the energy investment thesis. ConocoPhillips provides direct commodity leverage and cash return optionality. Oneok delivers midstream stability with consolidation upside. NextEra Energy offers regulated utility predictability combined with renewable infrastructure growth.

Together, these three companies represent a balanced approach to energy sector exposure, combining high current yields with credible long-term total return drivers. For investors seeking to establish or expand oil and gas stocks positions, this trio merits serious consideration within a diversified portfolio.