Some of the market's best dividend stocks come from an industry that can be surprisingly dependable for income investors: energy. Oil and natural gas prices can swing sharply from one year to the next, yet energy stocks have never been forced to cut their dividend payments. ExxonMobil Holdings Corporation (NYSE:XOM) and Chevron Corporation (NYSE:CVX) both announced their quarterly dividends on July 31.
The two companies are popular among income investors and are part of the Dividend Aristocrats group, which includes companies that have raised their dividends for more than 25 consecutive years. Chevron has several things working in its favor when it comes to the dividend. The company generates strong cash flow, is growing production, and has a long history of raising its payout.
It now pays $1.78 per share each quarter, or $7.12 annually, after a 4% increase announced in January 2026. That is encouraging for income investors, particularly given Chevron's long record as a Dividend Aristocrat. Chevron Corporation (NYSE:CVX)'s recent operating performance also gives the dividend some support.
Strong production and earnings give the company room to fund the payout while continuing to invest in the business. If oil and gas prices remain favorable, Chevron should be able to keep raising its dividend while maintaining its broader capital-return strategy. The dividend yield also makes Chevron Corporation (NYSE:CVX) appealing to income investors.
Based on its $7.12 annual payout, CVX currently offers a yield of roughly 3.6%. That is a meaningful income stream and puts Chevron ahead of Exxon on yield at current prices. The main risk is still the cyclical nature of oil and gas prices.
If crude prices stay low for a long time, Chevron could see pressure on earnings and free cash flow. That would make it harder to keep raising the dividend at the pace investors have seen in the past. The latest 4% increase was also fairly modest compared with Chevron Corporation (NYSE:CVX)'s longer-term record, so investors should keep that in mind when thinking about future increases.
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