Warren Buffett raised a lot of eyebrows on Wall Street last year when he made a big $7.7 billion bet on Occidental Petroleum (NYSE:OXY), a stock he is still buying. Just this past March, he bought another billion dollars worth, raising his stake in the oil giant to over 23%, clearly making it one of the billionaire’s favorite energy stocks.

Since then, Occidental has gained 25% in value compared to the S&P 500’s loss of 5%. However, that doesn’t mean you should just blindly follow the lead of Buffett or any other billionaire investor. That’s a prescription for disaster. Instead, use the smart money’s investments as a roadmap to guide you. Perform your own due diligence to turn riding the coattails of billionaires into a lucrative strategy.

Although many energy stocks are down from their recent peaks, the industry has long-term tailwinds, suggesting they could be good buys now. Here are three energy stocks owned by billionaires that deserve a closer look.

Devon Energy (DVN)

The 17% decline in Devon Energy (NYSE:DVN) stock over the past year follows the drop in crude oil prices as fears of a recession driven by Federal Reserve interest rate hikes create uncertainty.

Yet the International Energy Agency forecasts record petroleum demand growth this year, even as global supplies decline. That should help push prices back toward $100 per barrel, a positive long-term trend that likely attracted billionaire investor Ray Dalio to DVN stock. His Bridgewater Associates had an $11.1 million stake in the U.S.-focused energy producer at the end of the fourth quarter.

Devon expects volumes to grow to 653,000 barrels of oil equivalent at the midpoint of its forecast for 2023, with balanced exposure to oil and natural gas production. Devon says the capital investment necessary to finance this growth is between $3.6 billion and $3.8 billion. Because Devon possesses a strong balance sheet with $1.5 billion in cash, it has enough to self-fund its plans even if oil collapses all the way down to $40 per barrel. It also possesses low leverage at 0.5 times net-debt-to-EBITDA and a solid investment-grade credit rating of BBB, which lets it return more free cash flow to shareholders.

With its stock down, though, Devon’s fixed-plus-variable dividend yield is 10.5%. The fixed portion is targeted at 10% of its operating cash flow (OCF), while the variable component is up to 50% of OCF. That might not be ideal for pure dividend investors as income can fluctuate wildly, but Devon Energy is a stock other investors might want to consider.

Chevron (CVX)

Chevron (NYSE:CVX) is one of the biggest integrated oil and gas companies in the world. It engages in the exploration, production and refining of oil and natural gas, along with the marketing and distribution of fuel products. Most of its earnings come from assets in international markets, where energy demand is likely to outpace that of the U.S.

Chevron is certainly an energy stock with billionaire support. Dalio has put $56 million into it, and it is one of Buffett’s largest holdings. No doubt these billionaires invest in CVX for many of the same reasons that make Devon an attractive stock. But they’re likely also interested because Chevron is just a rock-solid business.

CEO Mike Wirth explained during the oil giant’s investor day presentation in February Chevron ended 2023 with $18 billion in cash on its balance sheet but only needs $5 billion a year to actually operate the business. It’s targeting free cash flow growth of 10% compounded annually over the next five years. 

Chevron will also continue to raise its dividend as it has for 36 consecutive years. The energy giant also just increased its stock buyback guidance to between $10 billion and $20 billion annually. Should oil prices fall to $50 per barrel, it can still repurchase $10 billion worth of stock, all the while reinvesting in the company.

Chevron’s dividend currently yields 3.9% annually, which ought to put it on every investor’s radar.

Enterprise Products Partners (EPD)

Enterprise Products Partners (NYSE:EPD) is one of the largest publicly traded partnerships in the U.S. It has over 50,000 miles of pipelines, 14 billion cubic feet of storage for natural gas storage, and over 260 million barrels of storage capacity for natural gas liquids, crude oil, refined products and petrochemicals.

What makes Enterprise Products Partners particularly attractive is that it is the middleman of the energy industry. It generates most of its revenue from long-term, fixed-fee or take-or-pay contracts. So no matter if its customers accept delivery of the product or not, Enterprise still gets paid.

One of the first things investors might notice about Enterprise Products is its generous dividend, which currently yields 7.8% annually. It has raised its distribution for 24 straight years. Bruce Berkowitz of Fairholme Capital Management is one billionaire betting on energy stocks, with 4.1 million shares of EPD. Its dividend alone is generating about $8.1 million a year for Berkowitz. The stock itself is worth about $100 million. 

However, it is important to consider the safety of the payout, which you can determine from the distribution coverage ratio. That’s the amount of cash flow available for distribution compared to what the company disburses to its shareholders. That should not fall below one, because that implies the payout is unsustainable.

Enterprise Products Partners coverage ratio was a healthy 1.8 at the end of the first quarter. Even during the pandemic, it never dipped below 1.6.

Master limited partnerships like this are not for everyone. There can be complex tax issues and growth might not be as robust going forward. However, Enterprise Product’s dividend yield ought to help make up for that.

On the date of publication, Rich Duprey held a LONG position in CVX stock. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.