Key Takeaways
- TotalEnergies yields 4.5% and Plains All American Pipeline yields 6.9% at today’s prices, and both are paying more this year than last.
- TotalEnergies’ dividend took 51% of its free cash flow over the twelve months to June 30, 2026, and its net debt is just 0.5x EBITDA.
- Plains All American covered its fiscal 2025 distribution 1.7x with distributable cash flow, but it carries 3.7x net debt to EBITDA and cut its distribution from $2.50 a unit in fiscal 2016 to $0.72 by fiscal 2020.
- At each stock’s five-year dividend growth rate, $10,000 in Plains All American pays about $87,000 over 20 years, against about $15,000 for TotalEnergies.
If you’re buying a dividend stock to hold for 20 years, the check has to make it through a few oil downturns. Both TotalEnergies (TTE) and Plains All American Pipeline (PAA) are paying more this year. On Oct. 28, TotalEnergies declared a third interim dividend of €0.90 a share for fiscal 2026, 5.9% above what it paid for fiscal 2025. Plains’ third-quarter distribution of $0.4175 a unit is 10% above the $0.38 it paid a year earlier.
At today’s prices, Plains yields 6.9% and TotalEnergies 4.5%. (TotalEnergies sets its dividend in euros, so the dollar amount moves with the exchange rate, and France withholds tax from a US holder’s dividend. Plains is an MLP, so it pays distributions on units, and holders get a K-1.)
So which one would I hold for 20 years?
| Metric | TotalEnergies (TTE) | Plains All American (PAA) |
|---|---|---|
| Yield at today’s price | 4.5% | 6.9% |
| Dividend growth, fiscal 2020-2025 | 4.9% a year | 16.7% a year |
| Dividend growth, fiscal 2015-2025 | 3.8% a year | -5.6% a year |
| Cash dividend payout ratio (TTM to June 30, 2026) | 51% | Not its measure |
| Distributable cash flow coverage (fiscal 2025) | Not its measure | 1.67x |
| Net debt / EBITDA (LTM) | 0.52x | 3.7x |
| Interest coverage (LTM) | 10.2x | 2.8x |
Source: TIKR and StockAnalysis, at today’s prices.
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TotalEnergies has room to pay more
TotalEnergies earned $9.1 billion of adjusted net income in the third quarter of 2026, helped by record downstream results. Management now expects full-year 2026 cash flow above $42 billion.
The dividend took a comfortable 51% of free cash flow over the twelve months to June 30, 2026. Here’s how free cash flow and dividends paid have compared over the last ten fiscal years:
Free cash flow fell short only in fiscal 2016 and fiscal 2020. Even so, the dividend rose from $2.77 a share in fiscal 2015 to $3.18 in fiscal 2020. Fiscal 2025 was tight, at 72.7%.
The company’s policy is to return 40% of cash flow through dividends and buybacks, and its $3.7 billion in the third quarter came to about 30% of that quarter’s cash flow. On its third-quarter call, the company said that “if necessary, it might adjust upward the final dividend to meet the 40% return.”
The risk is that TotalEnergies’ cash moves with oil, gas and refining prices.
Plains pays more, on a thinner cushion
Plains offers a much bigger check than TotalEnergies, with far less room behind it. In May it sold its Canadian NGL business. CEO Willie Chiang said on the third-quarter call that what’s left is a crude business with “a more durable and predictable cash flow stream post-NGL sale.”
Third-quarter adjusted EBITDA rose 6% from a year earlier, from $669 million to $711 million, though the quarter missed analysts’ estimates.
Distributable cash flow covered fiscal 2025’s distribution 1.67x, a solid margin. That cushion has narrowed every year since it hit 3.21x in fiscal 2020. Distributions more than doubled over that time, from $0.72 to $1.56 a unit, while distributable cash flow rose only from $2.31 to $2.61:
Plains targets raises of $0.15 a unit a year, about 9% of today’s $1.67. So unless distributable cash flow grows faster than it has since fiscal 2020, coverage keeps narrowing.
So which dividend wins?
If I can only hold one dividend stock for the next 20 years, it’s TotalEnergies. TotalEnergies pays out 51% of its free cash flow, with net debt at 0.5x EBITDA. Plains carries 3.7x and covers its interest just 2.8x, and its debt was far higher the last time it cut:
Net debt was 7.9x EBITDA in fiscal 2016. Over the next four years, Plains cut its distribution from $2.50 a unit to $0.72. Leverage was back up to 4.7x in fiscal 2025, though the company puts it at about 3.6x pro forma after the third quarter.
At each stock’s five-year growth rate, $10,000 in Plains pays about $86,800 over 20 years, against about $14,600 for TotalEnergies. But Plains’ 16.7% rate starts from the cut, and a flat $0.15 raise is a smaller percentage every year.
That doesn’t make Plains a bad pick. A 6.9% yield is a lot of income, and the distribution is 1.67x covered. It’s just that, over 20 years, I’d rather own the check with the stronger balance sheet behind it.
Of course, Plains gives its 2027 guidance in February. A plan to grow distributable cash flow faster than its raises would make this a much closer call.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
