The energy sector is now on the rebound as crude oil prices bounce back. But there's another reason traders are looking at those stocks: juicy dividends.
Oil stocks got hammered in previous months as the price of crude plummeted. Yet one of the effects of falling share prices is higher dividend yields. As the S&P 500's energy sector dropped 19 percent in the second half of 2014, forward estimated dividend yields went from 2.3 percent to 3.0 percent (per FactSet data). This is because many companies consider dividends a high priority, and so are greatly resistant to cutting them even in bad times.
For a couple of the mega-cap oil companies, yields are even higher. Exxon Mobil, the third-largest company in the S&P 500, now has a dividend yield of nearly 3.2 percent, while Chevron's yield is 3.9 percent.