Three Gas Stocks Positioned for Strong Dividend Growth Ahead

The energy sector has seen modest gains in recent years, with the average energy stock returning around 4% year-to-date through 2025, significantly lagging the broader market’s 18% advance. Lower crude prices have weighed on this segment’s performance. However, with global energy demand expected to remain robust, savvy investors are looking at established gas stocks and energy producers positioned to capitalize on this ongoing requirement. Here are three compelling opportunities in the energy space that merit serious consideration.

The traditional energy industry continues to represent a critical pillar of the global economy. Despite near-term headwinds, several leading gas stocks and energy infrastructure companies are generating substantial cash flows and maintaining strong dividend policies. For income-focused investors, these names offer an attractive combination of current yield and growth potential.

ConocoPhillips: Enhancing Returns Through Project Execution

ConocoPhillips (NYSE: COP) stands as one of the world’s premier integrated oil and gas producers, boasting one of the industry’s most diversified and lowest-cost asset portfolios. The company currently maintains breakeven economics in the mid-$40s per barrel for its core capital program, with dividend coverage requiring approximately $50 per barrel. At current crude valuations around $60 per barrel, the firm is generating substantial surplus cash available for shareholder returns.

The path to improved returns looks particularly promising. The company expects its production cost structure to decline steadily as it realizes additional efficiencies from its transformational Marathon Oil acquisition. More significantly, ConocoPhillips is advancing three massive liquefied natural gas projects alongside its Willow Alaska initiative, targeting completion by 2029. These developments alone should add an incremental $6 billion annually to free cash flow by that time, assuming $60 crude—a meaningful expansion relative to the $6.1 billion generated through the first nine months of 2025.

This growing cash generation capacity is enabling ConocoPhillips to expand its shareholder returns. The company recently raised its 3.4% dividend by 8% and targets top-10 dividend growth performance within the S&P 500 going forward. Coupled with an active share buyback program, this cash return strategy positions the company to deliver compelling total returns over the coming years.

Oneok: Synergies and Expansion Fueling Steady Payout Growth

Oneok (NYSE: OKE) operates as one of America’s largest energy midstream infrastructure companies, with a business model generating predictable cash flows backed by long-term contracts and government-regulated rate structures. This cash foundation supports the company’s attractive 5.6% current dividend yield.

The company has pursued an aggressive but strategic expansion of its midstream platform. Its 2023 acquisition of Magellan Midstream Partners significantly broadened its reach into crude oil and refined petroleum infrastructure. Subsequently, the company acquired controlling and later full ownership stakes in Medallion Midstream and EnLink for a combined $10.2 billion investment through 2025. Management expects to capture several hundred million dollars in cost synergies and operational benefits from these transformational transactions over the next several years.

Beyond merger-driven growth, Oneok has greenlit multiple organic expansion projects, including the Texas City Logistics Export Terminal and the Eiger Express Pipeline. These capital initiatives should reach commercial operation by mid-2028, providing additional earning streams. Together, these merger synergies and organic projects should provide sufficient cash flow growth to support dividend increases of 3-4% annually—a steady, reliable income story that could drive outsized shareholder returns.

NextEra Energy: Regulated Growth and Long-Term Earnings Trajectory

NextEra Energy (NYSE: NEE) represents a diversified energy infrastructure platform combining a large regulated electric utility with a dynamic energy resources development and management business. The Florida-based utility operation generates rate-regulated earnings that trend higher over time, while the energy resources segment develops and operates long-term contracted assets and regulated infrastructure. This dual earnings engine supports a 2.8% dividend yield.

NextEra is positioning itself as a primary beneficiary of growing electricity demand. Its utility is committing substantial capital—over $100 billion through 2032—to upgrade and expand Florida’s power infrastructure to meet rising customer demand. In parallel, its energy resources platform is investing billions to build transmission capacity, expand natural gas pipeline systems, and develop new renewable energy projects. These multi-year capital programs are expected to generate earnings-per-share growth exceeding 8% annually over the next decade.

This sustained earnings trajectory is enabling NextEra to increase its dividend substantially, with a planned 10% raise next year followed by 6% annual growth through at least 2028. The combination of reliable earnings expansion, infrastructure investment, and growing dividend payments positions NextEra to produce attractive total returns going forward.

Three Core Energy Holdings Worth Monitoring

These three companies—ConocoPhillips, Oneok, and NextEra Energy—each offer distinct pathways to attractive returns through a combination of capital appreciation potential and steadily rising dividend income. Whether gaining exposure through gas stocks tied to traditional energy production, midstream infrastructure, or regulated utility models, investors have legitimate options for participating in the energy sector’s ongoing role in the global economy. The visible growth catalysts at each company suggest that dividend growth should remain achievable, providing a meaningful return component for long-term portfolio holders in the years ahead.