Oil and Gas Stocks as Part of Dividend ETFs

Energy stocks are a large component of dividend-based ETFs and getting bigger based on some research I have been looking at. As someone who works in the energy field, specifically oil and gas, I am exposed to the ups and downs of the industry on a daily basis. It is pretty hard to ignore the fact that energy seems to be on everyone’s minds these days as oil is above $100 and natural gas even appears to be making some solid gains. I was even reading the other day about some analysts now talking about $200 oil in the face of the peak oil discussion. It was no surprise then as I was looking at the holdings of some large dividend ETFs that a big chunk of their portfolio makeup was directed towards the oil and gas sector. Which oil and gas stocks are on these lists ? Here are the results from some of the major dividend-focused ETFs available to investors today.

The first fund I looked at was the Dow Jones Select Dividend Index Fund. This fund seeks investment results that correspond generally to that of the Dow Jones U.S. Select Dividend Index. The top oil and gas firms on this list include:

Chevron Corp.
OGE Energy Corp.

Th next fund is the The PowerShares Dividend Achievers. This fund seeks to replicate Mergent’s Broad Dividend Achievers Index, which is designed to identify a diversified group of dividend paying companies. These companies have increased their annual dividend for ten or more consecutive fiscal years. The top oil and firms that make up this fund include:

Exxon Mobil Corp.
Chevron Corp.
Kinder Morgan Energy Partners L.P.
Helmerich & Payne Inc.
TEPPCO Partners L.P.
Holly Corp.
Buckeye Partners L.P.

The next ETF invests primarily in stocks that tend to offer current dividends. The fund focuses on high-quality companies that have prospects for long-term total returns as a result of their ability to grow earnings and their willingness to increase dividends over time. These stocks typically—but not always—will be undervalued relative to the market and will show potential for increasing dividends. The fund is the Vanguard Dividend Growth Fund and holds the following oil and gas stocks:

ExxonMobil Corp.
Total SA ADR
Chevron Corp.
ConocoPhillips Co.

The final fund I looked at was the WisdomTree Dividend Top 100 Fund which seeks investment results that closely correspond to the price and yield performance, before fees and expenses, of the WisdomTree Dividend Top 100 Index. That index is created by selecting the top 100 companies ranked by highest dividend yield from the WisdomTree LargeCap Dividend Index. The oil and gas companies that are a part of this index include the following:

Progress Energy Inc.
DTE Energy Company
Duke Energy
Chevron Corp.

It is pretty obvious that the one constant is Chevron Corp. This one might be worth a look in an upcoming Dividend Stock Wednesday analysis. In my opinion, the oil and gas sector is going to be one to watch over the next few years as demand increases and companies figure out what their reserves really look like. It should be very interesting to watch.