3 Dividend Stocks to Thrive in 2025 Amid Energy Market Volatility

The global oil and gas sector presents both challenges and promising opportunities, with a complex range of factors influencing prices, production and consumption. Even though the sector is facing immense pressure to reduce emissions and transition to cleaner energy sources, it continues to be a major source of global energy demand.

Since the beginning of the coronavirus pandemic, the oil market has seen significant price volatility. However, due to certain key factors, dividend-paying stocks in the same space are relatively less volatile, thereby positioning APA Corporation APA, Petrobras PBR and Permian Resources Corporation PR for growth this year. Per Deloitte, the oil and gas industry paid out about $213 billion in dividends, and $136 billion in buybacks between January 2024 and mid-November 2024 globally.

The global oil market is becoming increasingly unstable as Organization of Petroleum Export Countries’ (OPEC+) recent production increases clash with signs of weakening demand and rising geopolitical tensions. Despite the uncertainties, the oil and gas industry’s capital management, increasing customer relationships and investments in advanced technologies are set to drive a solid 2025.

Extremely Volatile Energy Market

Although the oil and gas sector has always been volatile, there used to be a familiarity with the boom-and-bust cycles. The U.S. oil and gas sector is experiencing increased volatility due to a mix of geopolitical tensions, fluctuating supply-demand dynamics, and shifting policy landscapes. The CBOE Volatility Index sits near 19.65, indicating elevated market uncertainty.

Per U.S. Energy Information Administration (EIA), Brent crude oil prices are expected to increase to $65 per barrel in 2025, which is still a break-even point for many U.S. producers. Also, natural gas is expected to rise to more than $4 per million Btus later this year, reflecting strong summer demand.

In its recently published short-term energy outlook, EIA anticipates a WTI oil price of $61.81 per barrel in 2025, significantly below the 2024 reported figure of $76.60. The sector is highly susceptible to external disruptions, including global economic shocks and changes in government policies, contributing to sustained volatility.

Dividend Stocks to the Rescue

The drastic fluctuation of oil prices, plummeting into negative territory during the pandemic and now projected to surpass $60 per barrel this year, may discourage investors from allocating funds to energy companies.

Despite this volatility constraint, investors may consider dividend-paying companies belonging to the industry. This is because, generally, companies with a stable dividend-paying history are usually relatively less volatile than stocks with no dividend history. It is expected that companies that have been rewarding stockholders with dividends will try their best to continue paying at the same pace or higher next year, too, making the stocks attractive and less volatile to the vagaries of the market.

We have employed our Stock Screener to zero in on three such stocks. All these companies mentioned below carry a Zacks Rank #3 (Hold). With a dividend yield of more than 4%, all these companies have raised dividends over the past five years. Moreover, with a payout ratio of less than 60%, the companies ensure sustainability with enough scope for dividend increases. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

3 Stocks to Keep an Eye On

APA Corp maintains a systematic and shareholder-focused dividend policy based on returning at least 60% of its free cash flow through base dividends and share repurchases. The company consistently pays a quarterly dividend of 25 cents per share ($1 annually), reflecting a stable payout approach.

This commitment is supported by robust cash generation and ongoing cost-efficiency efforts. The company generated $1.1 billion in operating cash flow in the first quarter of 2025, reduced development capital by $150 million, and doubled annualized savings targets to $225 million. These measures not only preserve the free cash flow but also reinforce APA's ability to sustain dividend payments even during periods of market volatility. In first-quarter 2025 alone, the company repurchased 4.4 million shares (~$100 million) and paid out $91 million in dividends.  (Check APA Corp’s dividend history here).

APA Corporation Dividend Yield (TTM)

 

APA Corporation dividend-yield-ttm | APA Corporation Quote

Petrobras’ dividend policy is closely associated with its free cash flow. In first-quarter 2025, the company generated $4.5 billion in free cash flow and approved dividends of R$11.7 billion. This distribution is in line with the shareholder remuneration policy revised in July 2023, which prioritizes shareholder returns based on available cash flow while preserving investment capacity.

The policy reflects a well-balanced capital allocation strategy. In the first quarter, Petrobras allocated $2.9 billion to dividends, $4 billion to investments, and $2.1 billion to lease liability amortization. This approach enables the company to deliver shareholder value while safeguarding its financial health and supporting strategic initiatives, particularly in pre-salt oil development and decarbonization projects.  (Check Petrobras’ dividend history here).

Petroleo Brasileiro S.A.- Petrobras Dividend Yield (TTM)

 

Petroleo Brasileiro S.A.- Petrobras dividend-yield-ttm | Petroleo Brasileiro S.A.- Petrobras Quote

Permian Resources maintains a consistent and shareholder-focused dividend policy, driven by its strong financial performance and disciplined capital allocation. As of the second quarter of 2025, the company declared a base dividend of 15 cents per share of Class A common stock. This equates to an annualized rate of 60 cents per share, offering a 5% yield. This dividend is scheduled to be paid out on June 30, 2025, to shareholders of record as of June 16, 2025.

Apart from its dividend payments, the company also actively repurchases shares under its $1-billion share repurchase program. The company repurchased 4.1 million shares for $43 million at an average price of $10.52 per share in April 2025. The dividend policy is underpinned by PR’s robust financial foundation. The company reported a record adjusted free cash flow of $460 million in the first quarter of 2025 and maintained a low net debt-to-EBITDAX ratio of 0.8X.  (Check Permian Resources’ dividend history here).

Permian Resources Corporation Dividend Yield (TTM)

 

Permian Resources Corporation dividend-yield-ttm | Permian Resources Corporation Quote

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This article originally published on Zacks Investment Research (zacks.com).

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