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Globe and Mail
29-06-2025
- Business
- Globe and Mail
Prediction: These 3 High-Yield Oil Companies Just Secretly Moved to Secure Their Dividends
It's no secret that the market has lost interest in oil stocks over the past year. Indeed, all three stocks covered here -- namely, Devon Energy (NYSE: DVN), Diamondback Energy (NASDAQ: FANG), and Vitesse Energy (NYSE: VTS) -- have declined over the last year. As such, they now trade with excellent dividend yields or attractive price-to-free cash flow (FCF) multiples. Moreover, I think there's a strong possibility that all three companies have recently moved to reduce risk and secure their dividends. Here's why. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More » The oil price environment in the first half Israel's attack on Iran sent the price of oil spiking higher, as investors priced in the risk of ongoing instability in a critically crucial oil-producing region. However, before going into how oil companies responded to this, it's worth putting the move into context. The spike occurred after a few months of oil trading in the low-to-mid-$60 per-barrel range. In addition, sentiment toward oil turned negative following a slower economic growth outlook (due to tariff escalations and ongoing geopolitical tensions) and OPEC's decision to increase production. WTI Crude Oil Spot Price data by YCharts There's little doubt that sentiment turned negative after events in the spring. For example, Vitesse implemented a 32% cut in its planned capital expenditures and deferred completion of a couple of wells "in response to current commodity price volatility to preserve returns and maintain financial flexibility." Diamondback cut its planned 2025 capital expenditures to $3.4 billion to $3.8 billion from a previous range of $3.8 billion to $4.2 billion. While Devon didn't make any adjustments in connection with the commodity price environment, management noted, "With the ongoing market and price volatility, Devon will continue to monitor the macro environment and has significant flexibility to adjust its activity and capital programs" on its earnings release in early May. What happened after the recent oil price spike According to numerous reports, the attack on Iran on June 13 triggered a record amount of hedging volumes through Aegis Hedging Solutions. This company assists commodity companies with their hedging strategies. While some of it was possibly oil companies looking to get exposure to potentially higher prices, the likelihood is that it was independent oil companies taking advantage of the spike to hedge their near-term production. As we've already seen, all three companies have either cut their capital spending plans or are monitoring events with the option to do so. In addition, they all utilize hedging as an integral part of their capital allocation strategy, ensuring returns to investors through dividends and share buybacks. Hedging strategies and dividends While we won't know for sure until they release their second-quarter earnings, all three are strong candidates to have taken part in the rush to hedge their oil production. Hedging is an integral part of Vitesse's strategy, which enables it to maintain its $2.25-per-share dividend (current yield: 10%). As of the end of March, Vitesse had 61% of its remaining oil production hedged at an average price of $70.75 per barrel. Look for that figure to increase, or at least an increase in 2026 production volumes hedged. Diamondback is a conservatively run oil company that uses hedging to ensure its base dividend of $4 per share (currently equivalent to a yield of 2.9%). As of May, it had downside protection in place to $55 a barrel. In other words, at any price of oil above $55, Diamondback has upside exposure to the price of oil. The strategy is to enable cash flow to return to investors through a variable dividend or share buybacks, in addition to the base dividend. Again, look for Diamondback to have increased hedging activity in the quarter. As of the first quarter, Devon Energy had more than 25% of its expected 2025 oil production hedged. With that hedging in place, management estimates it will generate $1.9 billion in FCF at a price of oil of $50 per barrel, $2.6 billion at $60 per barrel, and $3.3 billion at $70 per barrel. These figures easily cover its fixed dividend of $0.96 per share (about $650 million in cash). With increased hedging in place, the fixed dividend (currently yielding almost 3%) will be even more secure. Stocks to buy for investors looking for passive income In particular, Diamondback's and Devon's dividends look very secure, and both have the potential to increase their discretionary dividends, make more share buybacks, or pay down debt. If I'm right, and they, and Vitesse, took advantage of the oil price spike, then passive income investors can sleep even sounder in the knowledge that their dividend income is safe. Should you invest $1,000 in Devon Energy right now? Before you buy stock in Devon Energy, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Devon Energy wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $713,547!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $966,931!* Now, it's worth noting Stock Advisor 's total average return is1,062% — a market-crushing outperformance compared to177%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of June 23, 2025
Yahoo
29-06-2025
- Business
- Yahoo
Prediction: These 3 High-Yield Oil Companies Just Secretly Moved to Secure Their Dividends
Independent oil companies rushed to increase hedges during the recent oil price spike. These three companies are strong candidates to have done so, based on their existing hedging strategies. Increased hedging, at the right price, will reduce downside exposure to the price of oil and help secure dividends. 10 stocks we like better than Devon Energy › It's no secret that the market has lost interest in oil stocks over the past year. Indeed, all three stocks covered here -- namely, Devon Energy (NYSE: DVN), Diamondback Energy (NASDAQ: FANG), and Vitesse Energy (NYSE: VTS) -- have declined over the last year. As such, they now trade with excellent dividend yields or attractive price-to-free cash flow (FCF) multiples. Moreover, I think there's a strong possibility that all three companies have recently moved to reduce risk and secure their dividends. Here's why. Israel's attack on Iran sent the price of oil spiking higher, as investors priced in the risk of ongoing instability in a critically crucial oil-producing region. However, before going into how oil companies responded to this, it's worth putting the move into context. The spike occurred after a few months of oil trading in the low-to-mid-$60 per-barrel range. In addition, sentiment toward oil turned negative following a slower economic growth outlook (due to tariff escalations and ongoing geopolitical tensions) and OPEC's decision to increase production. There's little doubt that sentiment turned negative after events in the spring. For example, Vitesse implemented a 32% cut in its planned capital expenditures and deferred completion of a couple of wells "in response to current commodity price volatility to preserve returns and maintain financial flexibility." Diamondback cut its planned 2025 capital expenditures to $3.4 billion to $3.8 billion from a previous range of $3.8 billion to $4.2 billion. While Devon didn't make any adjustments in connection with the commodity price environment, management noted, "With the ongoing market and price volatility, Devon will continue to monitor the macro environment and has significant flexibility to adjust its activity and capital programs" on its earnings release in early May. According to numerous reports, the attack on Iran on June 13 triggered a record amount of hedging volumes through Aegis Hedging Solutions. This company assists commodity companies with their hedging strategies. While some of it was possibly oil companies looking to get exposure to potentially higher prices, the likelihood is that it was independent oil companies taking advantage of the spike to hedge their near-term production. As we've already seen, all three companies have either cut their capital spending plans or are monitoring events with the option to do so. In addition, they all utilize hedging as an integral part of their capital allocation strategy, ensuring returns to investors through dividends and share buybacks. While we won't know for sure until they release their second-quarter earnings, all three are strong candidates to have taken part in the rush to hedge their oil production. Hedging is an integral part of Vitesse's strategy, which enables it to maintain its $2.25-per-share dividend (current yield: 10%). As of the end of March, Vitesse had 61% of its remaining oil production hedged at an average price of $70.75 per barrel. Look for that figure to increase, or at least an increase in 2026 production volumes hedged. Diamondback is a conservatively run oil company that uses hedging to ensure its base dividend of $4 per share (currently equivalent to a yield of 2.9%). As of May, it had downside protection in place to $55 a barrel. In other words, at any price of oil above $55, Diamondback has upside exposure to the price of oil. The strategy is to enable cash flow to return to investors through a variable dividend or share buybacks, in addition to the base dividend. Again, look for Diamondback to have increased hedging activity in the quarter. As of the first quarter, Devon Energy had more than 25% of its expected 2025 oil production hedged. With that hedging in place, management estimates it will generate $1.9 billion in FCF at a price of oil of $50 per barrel, $2.6 billion at $60 per barrel, and $3.3 billion at $70 per barrel. These figures easily cover its fixed dividend of $0.96 per share (about $650 million in cash). With increased hedging in place, the fixed dividend (currently yielding almost 3%) will be even more secure. In particular, Diamondback's and Devon's dividends look very secure, and both have the potential to increase their discretionary dividends, make more share buybacks, or pay down debt. If I'm right, and they, and Vitesse, took advantage of the oil price spike, then passive income investors can sleep even sounder in the knowledge that their dividend income is safe. Before you buy stock in Devon Energy, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Devon Energy wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $713,547!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $966,931!* Now, it's worth noting Stock Advisor's total average return is 1,062% — a market-crushing outperformance compared to 177% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 23, 2025 Lee Samaha has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Vitesse Energy. The Motley Fool has a disclosure policy. Prediction: These 3 High-Yield Oil Companies Just Secretly Moved to Secure Their Dividends was originally published by The Motley Fool Sign in to access your portfolio
Yahoo
25-06-2025
- Business
- Yahoo
Seeking Passive Income? This Dividend Stock Yields 9.6%.
For investors eyeing passive income, high-yield dividend stocks could be top bets. Holding stocks that are financially stable and have steady payouts can deliver both income and long-term capital appreciation. Among the leading dividend-paying stocks, Vitesse Energy (VTS) stands out for its high dividend yield of 9.6% and management's focus on maintaining and even growing its yearly payments. Seeking Passive Income? This Dividend Stock Yields 9.6%. Triple Your Kimberly-Clark Dividend with this Options Strategy 3 Safe-Haven Stocks to Buy to Ride Out Market Turmoil Tired of missing midday reversals? The FREE Barchart Brief newsletter keeps you in the know. Sign up now! Vitesse Energy has a unique business model that differs from that of the typical oil and gas producer. Rather than drilling its wells, the company primarily holds non-operated interests in oil and gas assets. This model allows Vitesse to participate in energy production without bearing the full burden of drilling and operating costs. This strategy enables Vitesse to remain lean while leveraging the development expertise and infrastructure of its partners. The company's assets are located in some of North America's most productive shale plays. This strategic asset positioning, coupled with solid data analytics and technical capabilities, gives Vitesse a competitive edge in identifying and executing high-return opportunities. Moreover, Vitesse Energy focuses on maintaining a low-leverage profile and managing risks through its robust hedging strategy, which reduces exposure to volatile oil and gas prices. This approach enhances its ability to maintain and even grow dividends, regardless of fluctuations in commodity prices. Its focus on building a diversified, low-leverage, and free cash flow-generating business has helped it deliver substantial dividends to its shareholders. Vitesse has steadily increased shareholder returns, distributing $63.6 million in 2024, $58.0 million in 2023, and $36.0 million in 2022. In the first quarter, Vitesse delivered a 7% dividend increase, reflecting its ability to generate significant cash flows despite macro uncertainty. Vitesse Energy is well-positioned to maintain steady dividend payments, thanks to its diversified assets and a strong pipeline of undeveloped drilling locations, which make up over 80% of its portfolio. With low maintenance capital needs, Vitesse could generate strong cash flows, supporting shareholder returns. Looking ahead, Vitesse is targeting undeveloped drilling locations. This approach offers greater flexibility in responding to fluctuating oil and gas prices while capturing the upside from technological improvements and cost efficiencies over time. The strategy ensures that Vitesse Energy can continue funding its dividend even in challenging market conditions. The focus on free cash flow generation signals a strong commitment to capital discipline. The company is also pursuing growth through acquisitions. With nearly 200 deals under its belt, Vitesse has established itself as a consolidator of non-operated interests across major U.S. shale plays. Its focus on acquiring smaller, non-operated assets at discounted prices helps boost production and accelerate growth. In addition, Vitesse is exploring larger deals, like its recent acquisition of Lucero. This move is expected to strengthen its balance sheet, enhance cash flow, and provide more options for future investments. Overall, the company aims to maintain a diversified portfolio to reduce risk and increase long-term returns. The energy company carries minimal debt and manages its capital structure efficiently. It aims to maintain its net debt-to-adjusted EBITDA ratio below 1x, a conservative benchmark that provides both flexibility and resilience. Furthermore, to manage price volatility, the company employs an active hedging program, locking in prices for part of its production to stabilize cash flow and protect against market fluctuations. Vitesse has recently taken steps to strengthen its financial position amid volatile commodity prices. It lowered its 2025 capital expenditure guidance by 32%. Notably, this move isn't a sign of weakness, as even with this substantial cut in planned spending, 2025 production is still expected to rise 23% over 2024 levels, showing that Vitesse can grow efficiently. These initiatives show that Vitesse Energy is focused on generating steady cash flows, enabling it to deliver substantial returns to its shareholders through consistent dividend payments. Analysts maintain a 'Moderate Buy' consensus rating on Vitesse Energy stock amid macro uncertainty. However, Vitesse Energy's disciplined capital allocation strategy, focus on generating free cash flow, low leverage, strategic acquisitions, a strong pipeline of undeveloped assets, and a high yield of 9.6% make it a solid investment for those seeking reliable passive income. On the date of publication, Amit Singh did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on
Yahoo
06-06-2025
- Business
- Yahoo
Vitesse Energy price target raised to $20 from $19 at Northland
Northland raised the firm's price target on Vitesse Energy (VTS) to $20 from $19 and keeps a Market Perform rating on the shares. Vitesse announced a $24M legal settlement in its favor from Hess Corp (HES) relating to a dispute on post-production deductions from its revenue, which was not in the firm's model and is a 'nice surprise,' the analyst tells investors in a research note. Easily unpack a company's performance with TipRanks' new KPI Data for smart investment decisions Receive undervalued, market resilient stocks right to your inbox with TipRanks' Smart Value Newsletter Published first on TheFly – the ultimate source for real-time, market-moving breaking financial news. Try Now>> See the top stocks recommended by analysts >> Read More on VTS: Disclaimer & DisclosureReport an Issue Vitesse Energy Resolves Legal Dispute with Hess Vitesse Energy downgraded to Market Perform from Outperform at Northland Vitesse Energy resumed with a Buy at Alliance Global Partners Vitesse Energy Reports Q1 2025 Results and Guidance Vitesse Energy's Earnings Call: Growth Amidst Volatility


Business Wire
01-05-2025
- Business
- Business Wire
Vitesse Energy Declares $0.5625 Quarterly Cash Dividend
GREENWOOD VILLAGE, Colo.--(BUSINESS WIRE)--Vitesse Energy, Inc. (NYSE: VTS) ('Vitesse') today announced that its Board of Directors declared its second quarter cash dividend for Vitesse's common stock of $0.5625 per share for stockholders of record as of June 16, 2025, which will be paid on June 30, 2025. ABOUT VITESSE ENERGY, INC. Vitesse Energy, Inc. is focused on returning capital to stockholders through owning financial interests predominantly as a non-operator in oil and gas wells drilled by leading US operators. More information about Vitesse can be found at