Energy Stocks with High Returns Available for Immediate Purchase During the Oil Resurgence
Diamondback Energy, a leading oil and gas company, has announced an increase in its quarterly dividend, pushing the payment to $0.75 per share. This marks a 7.1% increase from the previous quarterly dividend.
The first quarter of 2023 saw Diamondback Energy make its first variable dividend payment of $2.35 per share. With oil prices higher this year, companies like Diamondback are generating a significant amount of cash, enabling them to pay out substantial variable dividends.
The company's recent stock price of around $110 implies an 11% annualized dividend yield. Diamondback Energy has stated its intention to return up to 75% of its quarterly free cash flow to investors, suggesting that even higher variable dividends could be on the horizon.
However, Diamondback Energy retains the flexibility to pay a smaller dividend or none at all if it decides to prioritize share repurchases over variable dividends. In fact, the company ramped up its repurchases to more than $250 million after only buying back $7 million of stock in the first quarter.
Diamondback Energy is not alone in its variable dividend strategy. Companies such as Devon Energy and Pioneer Natural Resources also pay variable dividends based on their cash flows. As of mid-2025, Devon Energy offers about a 3.55% dividend yield, Diamondback Energy about 2.75%-2.9%, and Pioneer Natural Resources approximately 2.75%.
It's important to note that these dividend payments are sensitive to oil price fluctuations. Higher oil prices generally translate into stronger cash flows, supporting stable or potentially higher dividend payments. On the other hand, declines in oil prices can pressure earnings and cash flow, leading companies to reduce or suspend dividends to conserve capital.
This relationship between dividend payments and oil prices is evident in Devon Energy’s recent dividend history, which indicates a 44% decline over the past year, likely influenced by oil price volatility and earnings pressure.
In conclusion, investors looking for dividend-paying oil and gas stocks may find Diamondback Energy, Devon Energy, and Pioneer Natural Resources attractive options. However, it's crucial to keep in mind that these dividends are tied to the commodity price environment and overall energy market conditions rather than being fixed.
[1]: Source for Devon Energy's dividend history and yield: [link to source] [3]: Source for Diamondback Energy's dividend yield: [link to source] [5]: Source for approximate dividend yields of Devon Energy, Diamondback Energy, and Pioneer Natural Resources: [link to source]
- Diamondback Energy, Devon Energy, and Pioneer Natural Resources are investing their higher cash flows, thanks to the current oil price environment, into substantial variable dividends.
- These energy companies, including Diamondback Energy, have shown flexibility, as they could potentially prioritize share repurchases over regular dividends.
- In the finance industry, variable dividends from energy companies like Devon Energy, Diamondback Energy, and Pioneer Natural Resources can be sensitive to fluctuations in oil prices, with higher prices supporting stronger cash flows and potentially higher dividends.
