After lagging the market in 2023, dividend-paying stocks could be set for a comeback year in 2024. One area of the market familiar to yield-hunting investors is the energy sector, where healthy dividend payments can help to offset some of the volatility that comes with investing in assets so heavily tied to oil prices. 

Within the group, master limited partnerships (MLPs) are known for offering particularly rich dividend yields, thanks to their unique tax structure. Here's a closer look at two buy-rated energy stocks with dividend yields north of 6%.

Plains All American Pipeline Stock

Houston-based Plains All American Pipeline (PAA) is involved in the transportation, processing, storage, and marketing of refined products, crude oil (CLG24), liquefied petroleum gas, and natural gas (NGG24), among other related products. They are mainly focused on the market hubs of the United States and Canada. 

Plains All American stock has gained 33% over the past 52 weeks, compared to a slightly negative return for the broader S&P 500 Energy Sector SPDR (XLE).

Along with the share price outperformance, the company currently rewards shareholders with a quarterly dividend of $0.27, for a forward yield just shy of 7%.

Unlike other energy companies focused on drilling, which have higher exposure to volatility in oil prices, PAA is mainly involved in midstream and downstream operations. This shelters the company from some exploration-related risk. Additionally, PAA has assets in the booming Permian Basin region, as well as the more cost-effective Eagle Ford.

In early November, PAA reported Q3 results that beat on the bottom line, even as revenue fell short of estimates. EPS of $0.35 comfortably topped expectations, while revenue fell 15.8% year-over-year to $12.07 billion. For the full year, PAA raised its EBITDA forecast to a range between $2.60-$2.65 billion, up from prior guidance of $2.45-$2.55 billion.

Analysts have a “Moderate Buy” rating on Plains All American’s stock, with the mean price target of $17.38 reflecting an upside potential of more than 12% from current levels. Out of the 17 analysts currently covering the stock, 10 have a “Strong Buy” rating, 5 have a “Hold” rating, and 2 have a “Strong Sell” rating on the stock. 

Plains GP Holdings Stock

Plains GP Holdings (PAGP) is a publicly traded company that is a limited interest partner of PAA and owns a non-economic controlling partner interest in PAA. Investors in PAGP will receive a 1099 at the end of the year, instead of the K-1 form that MLP investors can expect.

Like PAA, shares of Plains GP Holdings outperformed the broader energy sector in 2023. The stock sports a 52-week return of over 32%.

PAGP's quarterly dividend is $0.27, which translates to a forward yield of 6.63%.

Analysts have a “Moderate Buy” rating for Plains GP Holdings stock, with the mean price target of $17.30 suggesting potential upside of 6.8%. Out of the 15 analysts currently covering the stock, 9 have a “Strong Buy” rating, 4 have a “Hold” rating, and 2 have a “Strong Sell” rating.