The Smartest High-Yield Energy Stocks to Buy With $500 Right Now | The Motley Fool

A significant shift is occurring in the world today regarding energy. Simply put, more realistic plans to transition toward cleaner energy sources appear to be gaining traction. If the trend continues, it means that oil and natural gas will remain vital to the world's energy picture for longer than currently estimated. That could make these two high-yield energy stocks below a great choice for income investors. Here's what you need to know. Oil and natural gas aren't going anywhere for now The fear of global warming has prompted governments worldwide to set ambitious targets for reducing greenhouse gas emissions. Given that carbon fuels are a big source of those gases, oil and natural gas were center stage, and not in a good way. However, the reality is that these energy sources are vital to the world's functioning. Image source: Getty Images. Even more notable, there's no quick, easy, or cost-effective way to replace oil and natural gas. The renewable power transition was always going to be a decades-long affair. Now it appears that governments are starting to admit this fact and, more importantly, address the reality of the situation. Even once influential and vocal supporters of change, such as Bill Gates, have materially softened their stance. Given the improving backdrop for oil and natural gas, now could be a good time for dividend lovers to take a hard look at high-yielders like Chevron ( CVX +0.19%) and Enterprise Products Partners ( EPD 0.25%). Chevron: Direct oil and gas exposure Chevron is the better choice if you want to have exposure to oil and natural gas prices. The stock has a 4.6% dividend yield , and the dividend has been increased annually for 38 consecutive years. It is one of the largest energy companies on the planet. There are two reasons why this is a great dividend choice, beyond the yield and dividend history. First, Chevron is an integrated energy company, meaning its business spans the entire energy value chain. Having diversified exposure across the upstream (energy production), midstream ( pipelines ), and downstream (chemicals and refining) helps mitigate the inherent volatility of the energy sector. NYSE: CVX Key Data Points However, there are other integrated energy companies that compete with that same business model. Chevron's attractive because it layers that atop a rock-solid balance sheet , with a debt-to-equity ratio of just 0.22. That would be low for any company, and it gives Chevron the wherewithal to support its business and dividend through the energy sector's normal business swings. To be fair, ExxonMobil has a longer dividend streak and a lower debt-to-equity ratio. But Exxon's yield is also a full percentage point lower, too. That will likely make Chevron the smarter dividend stock for most investors, with $500 netting you roughly three shares. Enterprise Products Partners: Avoid commodity risk More conservative dividend investors may find that Chevron's oil and gas exposure makes its earnings a bit too volatile. If that's the case, you still have options. Enterprise Products Partners sidesteps...

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