Energy stocks have emerged as a standout trade in 2023, with oil prices surging over 75% in Q1 amid ongoing conflict in the Middle East. This spike has propelled the average energy stock in the S&P 500 to a more than 35% gain, significantly outperforming the broader market, which saw a nearly 5% decline. As uncertainty looms regarding future oil price movements, investors are advised to consider energy stocks with stable earnings insulated from crude price fluctuations.

Two notable candidates are Energy Transfer (ET) and Oneok (OKE), both of which derive 90% of their earnings from fee-based sources, minimizing their exposure to volatile oil prices. Energy Transfer has seen its built-in growth units rise over 15% this year, while still offering a nearly 7% distribution yield. Oneok, despite being down nearly 10% year-over-year, has gained over 20% this year and boasts a 4.7% dividend yield, supported by ongoing expansion projects.

In a market characterized by uncertainty, Energy Transfer and Oneok present compelling investment opportunities, combining stable cash flows with attractive dividend yields that can weather potential declines in oil prices.

Source: fool.com