NEW YORK (TheStreet) -- For dividend income, it is tough to beat Big Oil stocks such as BP (BP), ConocoPhillips (COP), and Royal Dutch Shell (RDS-B). What makes BP, ConocoPhillips, and Royal Dutch Shell even more attractive for long-term investors is how much more the stock prices fluctuate than the average for the market. As a result, patient investors should have the opportunity to buy when the share price is lower with the dividend yield that much higher.
This method for buying dividend stocks was detailed in a previous article on TheStreet, "Hunting for Higher Dividends."
Stocks with a high beta move more than the market as a whole, which has a beta of 1. When the share price drops, the dividend yield becomes that much higher. The beta for BP is 1.62. That means that the stock price moves 60% more for BP than the overall stock market. For Royal Dutch Shell, beta is 1.08. ConocoPhillips has a beta of 1.08.
Having a higher beta hardly means that these companies have a higher risk of failure, though.Royal Dutch Shell, with a market capitalization of $232.6 billion, is the second largest oil and natural gas company in the world behind only Exxon Mobil (XOM), at $435.8 billion. But Royal Dutch Shell has more annual sales ($460.04 billion) than Exxon Mobil ($424.71 billion). BP has almost as much in annual sales ($400.93 billion) as ExxonMobil, too. With more than $60 billion in sales, ConocoPhillips also has a solid place in the global energy market. The dividend income component of BP, ConocoPhillips and Royal Dutch Shell really impresses. The dividend yield for BP is 4.73%. For Royal Dutch Shell, it is 4.64%. ConocoPhillips provides a stream of dividend income to its shareholders at a 4.09% rate. Due to how much the shares move for these equities, investors can buy the stock at a lower price with a higher dividend yield.
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