By Alex Kimani - Jul 22, 2024, 7:00 PM CDT The energy sector remains comparatively cheap compared to other sectors. Stock analysts at Morningstar advise looking for stocks with durable dividends and buying those stocks when they’re undervalued. 5 stocks including two South American oil majors stand out. The U.S. stock market is enjoying another banner year with five sectors boasting double-digit returns in the year-to-date. The S&P 500 Energy Sector has returned 10.4% YTD, below the S&P 500 average return at 15.4% but still the 5th best showing among 11 U.S. market sectors. It’s becoming increasingly clear that investors should not write off oil and gas stocks despite the ongoing clean energy transition. Indeed, under most key metrics, the U.S. oil and gas industry has flourished under the Biden administration despite its push towards a carbon-free future, proving that not even Washington has sufficient power to single-handedly sway large, globally interconnected markets like oil and gas. Big Oil investors are hardly complaining: Profits of the top five publicly traded oil companies, namely Exxon Mobil Corp. (NYSE:XOM), Chevron Corp.(NYSE:CVX), BP Inc.(NYSE:BP), Shell Plc (NYSE:SHEL) and TotalEnergies SE (NYSE:TTE) rocketed to $410 billion during the first three years of the Biden administration, a 100% increase compared to the corresponding period of Donald Trump’s presidency. ';document.write(write_html);} Income investors hunting for a steady income stream should consider including high-yielding energy stocks in their portfolios considering that the sector remains the cheapest in the U.S. market. Stock analysts at Morningstar advise looking for stocks with durable dividends and buying those stocks when they’re undervalued. “It’s really critical to be selective when it comes to buying dividend-paying stocks and chasing yield. Looking for the most yield-rich areas of the market can often lead you into troubled areas and dividend traps—companies that have a nice-looking yield that is ultimately unsustainable. You have to screen for dividend durability and reliability going forward,” explains Dan Lefkovitz, a strategist for Morningstar Indexes. ';document.write(write_html);}else{var write_html=' Here are 5 Oil & Gas stocks that pay the highest dividends. Ecopetrol S.A.