5 Small-Cap Energy Dividend Stocks to Grab While They're Cheap

Fueled by the rising prevalence and adoption of artificial intelligence (AI), global energy demand to support these power-hungry platforms is increasing rapidly, as well. A Goldman Sachs (GS) report forecasts a 160% surge in data center power needs by 2030. Similarly, a World Economic Forum study suggests AI could consume more power by 2028 than Iceland used in 2021, highlighting the potential strain on energy resources.

Beyond AI, energy demand should catch a boost from the “revenge travel” trend, as JPMorgan's (JPM) commodity analysts are forecasting that demand for crude (CLQ24) and products will surge by 3.5 million barrels per day (mbd) and 2.4 mbd, respectively, between April and August. 

Separately, energy prices should also find support from the extension of OPEC production cuts, totaling 5.8 million barrels a day, through the next year. 

Given these short-term and long-term growth drivers, investing in energy stocks can be a smart choice for investors now. And with investors increasingly rotating out of mega-caps, here are 5 names from the small-cap energy space that pay dividends, and are attractively valued at current levels.

#1. Teekay Tankers

Founded in 1973 Teekay Tankers (TNK) is a Canadian marine energy transportation leader, specializing in shuttle tankers, liquefied natural gas (LNG) carriers, and floating, production, storage and offloading units. Its market cap currently stands at $2.13 billion.

Up an impressive 25.6% on a YTD basis, TNK stock also offers a dividend yield of 1.61%. Moreover, the stock is trading at a forward p/e of 4.31, which is well below the sector median of 11.85.

Overall, 4 analysts have unanimously deemed TNK stock a “Strong Buy,” with a mean target price of $75.25. This indicates an upside potential of about 20% from current levels.

#2. Riley Exploration Permian

Oklahoma-based Riley Exploration Permian (REPX) is an independent oil and natural gas (NGQ24) exploration and production company. Their primary focus is on the Permian Basin, specifically the Northwest Shelf and Yeso trend, located in Texas and New Mexico. The company's market cap currently stands at $649 million.

REPX stock is up 9.4% on a YTD basis, and it offers a dividend yield of 4.77%. The shares are priced at less than 5 times forward earnings.

The two analysts in coverage both maintain a “Strong Buy” for REPX stock, with the mean target price of $48.75 indicating an upside potential of about 63.6% from current levels.

#3. Scorpio Tankers

Founded in 2009 and based out of the tax haven of Monaco, Scorpio Tankers (STNG) is a leading provider of marine transportation for refined petroleum products, not crude oil. Their fleet consists primarily of LR2 product tankers, a mid-size class ideal for long-distance voyages. Its market cap currently stands at $4.06 billion.

STNG stock is up 23.9% on a YTD basis, and it offers a dividend yield of 2.15%. Additionally, its forward p/e of 5.41 looks cheap.

Analysts have a consensus rating of “Strong Buy” for STNG, and the mean target price of $85.78 denotes an upside potential of roughly 13.8% from current levels. Out of 8 analysts covering the stock, 7 have a “Strong Buy” rating and 1 has a “Hold” rating.

#4. Crescent Energy Company

Founded in 2002 and based out of Houston, Crescent Energy Company (CRGY) is a diversified independent U.S. energy company. They focus on oil and gas exploration and production, as well as asset management, with the company managing a portfolio of oil and gas properties. CRGY is currently valued at a market cap of $2.15 billion.

CRGY stock is down 8.8% on a YTD basis, and the stock offers a dividend yield of 3.95%. Further, Crescent Energy stock is trading at a forward p/e of 6.34, a significant discount to its peers.

Overall, analysts have an average rating of “Strong Buy” for CRGY stock, with a mean target price of $17.33. This indicates an upside potential of about 42.7% from current levels. Out of 8 analysts covering the stock, 6 have a “Strong Buy” rating and 2 have a “Hold” rating.

#5. Northern Oil and Gas

Based out of Minneapolis, Northern Oil and Gas (NOG) is an independent upstream oil and natural gas company. However, unlike traditional exploration and production companies, they focus on acquiring non-operating, minority interests in oil and gas wells. This means they own a percentage of ownership in wells operated by major producers. Its market cap currently stands at $4.21 billion.

NOG stock is up 11.5% on a YTD basis, and it offers a dividend yield of 3.84%. The stock's forward p/e of 8.23 is a healthy discount to the rest of the energy sector.

Overall, analysts have a consensus rating of “Strong Buy” for NOG, with a mean target price of $49.96 - indicating an expected upside potential of about 20.9% from current levels. Out of 12 analysts covering the stock, 8 have a “Strong Buy” rating, 2 have a “Moderate Buy” rating, and 2 have a “Hold” rating.