The energy sector was a brutal place to invest in 2014 and 2015.

In the 18 months from July 2014 to January 2016, the Energy Select Sector SPDR ETF (NYS: XLE) fell nearly 50%. That decline was driven by a collapse in the price of oil, buckling from above $90 per barrel in the summer of 2014 to below $30 in January 2016.

#-ad_banner-#Today, this bear market has ended. With a new bullish cycle unfolding, this is the best time to invest in energy stocks in the last five years. Not only are energy sector yields near a multi-year high, valuations are near a multi-year low.

Perhaps most important, profits are set to rebound thanks to a breakthrough announcement from the Organization of Petroleum Exporting Countries (OPEC). Last week, OPEC made its biggest announcement in more than two years, saying that its members would cut global oil production by 1 million barrels per day beginning January 1, 2017.

This decision has big implications for the price of oil in the short run and long run. In the short run, it caused the price of oil to jump more than 10% in one day, hitting $50 a barrel for the first time in almost two years. In the long run, the production cut sets the stage for the price of oil to continue steadily rising, particularly next spring when seasonal demand will accelerate.

This reversal is a profit trigger for one of the global energy industry’s best dividend payers. This global leader’s 6.8% yield ranks higher than 85% of its peers and is a 225% premium to the S&P 500. And despite the outsized yield, shares are on sale.

That makes this a great time to lock in a great yield as the price of oil is set to steadily move higher.

An Industry-Leading Position
BP (NYSE: BP) is the third-largest energy company in Europe and sixth-largest in the world. Headquartered in London, shares of BP trade as ADRs on the New York Stock Exchange. That makes it easy for U.S. citizens to purchase shares.

BP is in position to cash in on the rising price of oil. Its global network of oil production, refinery, and distribution ranks among the most valuable in the world. It operates across three energy sub-industries: exploration and production (E&P), refining, and marketing.

Its largest and most important division is E&P, responsible for more than 70% of revenue. BP’s E&P division produced an average of 3.3 million barrels of oil per day in 2016, accounting for more than 3.4% of total global production of 96 million barrels.

Those impressive production statistics are supported by one of the world’s largest privately owned oil reserves, totaling more than 18 billion barrels oil at the end of 2016. That means BP can hypothetically continue extracting 3.3 million barrels per day for 5,312 days, almost 15 years, without replacing any reserves.

BP’s second-largest division is refining. The company owns 14 refineries, including one of the largest in the United States, in Whiting, Indiana. BP’s total daily refining capacity of 1.7 million barrels per day ranks among the highest in the world. It also owns and operates more than 18,000 gas stations across the world.

This impressive portfolio of global energy assets has BP in position to cash in on the rising price of oil. Accordingly, analysts are projecting BP’s earnings to jump 148% in 2017 to $2.62 per share. I expect BP to use increased earnings and cash flow to reward shareholders with billions in dividend payments.

Industry-Leading Dividend And Dividend Growth
BP quarterly dividends are some of the best in the energy industry. BP makes a fixed dividend payment — a pre-determined amount that is not impacted by quarterly earnings or other key financial metrics. Even better, BP is one of the rare ADRs that pays its dividend in U.S. dollars – enabling U.S. shareholders to bypass expensive currency translations.

BP was forced to cut its dividend in 2011 because of its role in the Gulf spill. But before that unfortunate incident, BP was a rock-solid dividend payer dating back to 1989. However, since its 2011 dividend cut, BP has been aggressively recharging its dividend. In the last five years alone, its quarterly dividend payment has increased 43%.

Take a look below.

Those dividend increases have BP yielding 6.6% today, ranking higher than 85% of its energy industry peers.

There are rumblings about the stability of BP’s dividend. After all, the energy industry just went through a very scary period where many companies were concerned about the threat of bankruptcy. However, when the price of oil fell below $30, BP did not cut its dividend. With oil back above $50 and heading higher, there’s no reason to expect BP to cut its dividend now.

BP Trades At A Sharp Discount To Its Industry Peers And The S&P 500
Despite the strong outlook and outsized yield, BP is undervalued relative to its industry peer and the S&P 500.

Its forward P/E of 13 is well below the industry average of 42 and the S&P 500’s 17.

Risks To Consider: In the short run, BP is financing its dividend with debt as its free cash flows has fallen into the negative. While that is a threat to dividend sustainability, I expect BP’s free cash flow to spike in the next two years on the rising price of oil.

Action To Take: Thanks to a key breakthrough from OPEC, the price of oil is set to begin rising again. This is a profit trigger for BP, one of the largest energy companies in the world. Earnings growth will help fortify the company’s 6.8% dividend yield, one of the best in the global energy industry. Buy shares anywhere below $40, collect the outsized dividend and wait for shares to move higher on the rising price of oil.

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