Pain at the pump can be good for income-seeking investors-if they know where to look for high-quality energy stocks that are returning cash to shareholders.

The U.S. military recently started targeting Iranian oil tankers in retaliation for missile attacks on U.S. naval assets. The end result was another leg up for oil prices. International benchmark oil futures recently topped $100 per barrel, up from less than $80 a month ago.

Before the war, oil prices were relatively stable in the $60s.

Higher prices have certainly helped energy stocks, but not as much as you might expect. The Vanguard Energy exchange-traded fund is up almost 15% since fighting began-only about two percentage points ahead of the S&P 500 index. What's more, many oil stocks haven't kept up with their earnings estimates. ExxonMobil stock, for instance, is up about 8% since fighting began, but Wall Street's projections for 2027 earnings have risen almost 30%.

The reason for the apparent fundamental disconnect isn't hard to fathom: Oil prices could drop if things settle down. There is a way, however, to benefit from higher near-term oil prices, no matter what happens in the Strait of Hormuz. Investors can focus on the companies that are returning the most capital to shareholders in the form of dividends and stock buybacks.

Among large-cap companies, the highest yielders are natural-gas transporter Targa Resources, oil-and-gas producer EOG Resources, liquefied natural-gas company Cheniere Energy, Chevron, ConocoPhillips, and Exxon. The average dividend yield of the six is 2.3%, about the average yield for a dividend-paying stock in the S&P 500. Including buybacks, though, the total shareholder yield rises to 6.3%, more than double the S&P 500's shareholder yield.

Of this group, Targa, Cheniere, Chevron, and Conoco are Wall Street favorites, with above-average Buy-rating ratios among analysts. Buy ratings aren't the be-all for stocks, but it can be comforting to know that people who are paid to know companies feel good about their outlooks.

Among smaller companies, the highest yielders that are earning their payouts are Diversified Energy, which buys legacy wells from other producers; Bakken formation energy producer Chord Energy; natural-gas producer Antero Resources; oilfield equipment maker Nov; oil producer Ovintiv; and gas station operator Murphy USA. The average dividend yield of the six is about 2.5% (Antero doesn't pay a dividend), and the average shareholder yield is 9.1%.

Of that group, Diversified, Chord, Antero, and Ovintiv have above-average Buy-rating ratios on Wall Street.

Those are a dozen energy stocks to consider. Eleven of them are up over the past year. Through Wednesday's trading, Diversified was down 3%. Ten of the 12 stocks are cheaper than they were at the start of the Iran war. Targa and Cheniere are the exceptions. The large-cap group trades for about 16.5 times earnings expected over the coming 12 months, a discount to the S&P 500's 19.5 times multiple. The small-cap group trades for about 11.2 times.

The depressed multiples can give investors some confidence that valuations can normalize (that is, go up to prewar levels) if oil prices come down, supporting stock prices. There is, of course, the chance that oil prices don't come down anytime soon. The oil futures curve implies that prices will stay above prewar levels until 2031.

Both Goldman Sachs and BofA Securities have bumped up their oil price forecasts for 2027, citing persistent Middle East disruptions. "More disruptions could push [prices] toward $120 per barrel," wrote BofA's Francisco Blanch in a recent report. "While vast energy infrastructure damage could drive prices to $150 per barrel."

That outcome isn't reflected in energy stocks. That might be good news. No one really wants fighting to escalate or oil prices that high.