These energy stocks have high-octane total return potential.
I already own several energy stocks, including Chevron (CVX -0.91%), Enterprise Products Partners (EPD 0.21%), and EQT Corp. (EQT). However, I’ve had my eye on this trio all year. I like what I see ahead, which is leading me to consider buying even more shares.
Here’s why I’m eyeing the possibility of adding to these energy stocks in 2025.
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The coming cash flow gusher
Chevron is about to hit a major inflection point. The oil giant is starting up several major expansion projects, including the Future Growth Project in Kazakhstan and some new developments in the Gulf of Mexico (also known as the Gulf of America in the U.S.). The recent acquisition of Hess has further enhanced Chevron’s growth potential.
These and other catalysts have Chevron on track to produce an additional $12.5 billion in annual free cash flow starting next year. That’s a massive surge for a company that produced $15 billion in free cash flow last year. Thanks to the Hess deal, the company’s free cash flow should continue growing into the 2030s.
Chevron’s strong and growing cash flows will let it return even more money to shareholders. The company has raised its dividend for 38 years and leads the industry in dividend growth over the past decade. Chevron also plans to repurchase $10 billion to $20 billion of its stock each year. With a dividend yield approaching 4.5% and an expected cash flow growth spurt ahead, Chevron appears poised to deliver strong total returns in the coming years.
The upcoming growth wave
Enterprise Products Partners also has an upcoming growth wave. The master limited partnership (MLP) stands to benefit from commissioning $6 billion of capital projects this year, including new natural gas processing plants, Phase 1 of the Neches River Terminal, and the Bahia pipeline. The company also recently agreed to acquire some natural gas gathering assets for $580 million, further strengthening its operations and growth profile. These investments will boost Enterprise’s cash flows over the coming quarters.
The MLP has more projects on the docket for 2026. It currently expects to invest between $2.2 billion and $2.5 billion in capital projects next year, including a couple of additional gas processing plants, Neches Phase 2, and an expansion of the Enterprise Hydrocarbons Terminal. These projects will provide it with even more incremental sources of stable cash flow heading into 2027.
Enterprise’s growth wave will see its income increase as its capital spending falls. There will be about $2 billion less in 2026 than in 2025. That will provide the MLP with additional free cash flow to increase its 7%-yielding distribution and repurchase its units. This combination of higher growth and cash returns should fuel strong total returns for investors.
Capitalizing on lots of catalysts
EQT is now one of the country’s largest and lowest-cost natural gas producers. It is the only vertically integrated gas producer in the U.S., owning both upstream production and midstream infrastructure assets. This strategy enables EQT to generate more free cash than its peers, putting it in an even stronger position to benefit from surging gas demand driven by the growth of AI data centers and the onshoring of manufacturing.
The gas giant is already starting to see a step-change in its free cash flow following the completion of its Mountain Valley Pipeline project. It has produced almost $2 billion in cumulative free cash flow over the past three quarters. It’s using its financial flexibility to make bolt-on acquisitions that further enhance its scale while also paying down debt.
EQT recently closed its $1.8 billion purchase of Olympus Energy. Even with that acquisition, the company remains on track to achieve its target of reducing debt to below $7.5 billion by year’s end, down from $13.6 billion at this time last year. It’s also on pace to reach its long-term debt target of $5 billion by the end of next year. Once it reaches that goal, EQT will have more flexibility to return additional cash to shareholders through higher dividends and share repurchases.
Compelling, near-term catalysts
Chevron, Enterprise Products Partners, and EQT Corp all have near-term growth drivers that will boost their free cash flow and should allow for larger shareholder payouts. This potential for higher total returns has me eyeing whether I should buy more shares before their stocks run higher.
Matt DiLallo has positions in Chevron, EQT, and Enterprise Products Partners. The Motley Fool has positions in and recommends Chevron and EQT. The Motley Fool recommends Enterprise Products Partners. The Motley Fool has a disclosure policy.