It’s no secret that interest in the market is lost Oil stock in the past year. In fact, all three shares are covered here – that is,, Devon energy ,Deadnn -0.69%,, Diamondback Energy ,Feng -0.75%,And Vitasi energy ,VTS -1.66%, – There has been a decline in the last year. For example, they now trade with excellent dividend yields or attractive value-to-free cash flow (FCF) qualities.
In addition, I think there is a strong possibility that all three companies have recently gone to reduce the risk and secure their dividends. here’s why.
The atmosphere of oil price in the first half
The Israeli attack on Iran sent more to the price of oil spiking, as investors gave the risk of ongoing instability in the seriously important oil producing sector. However, before going to the oil companies reacted to it, it is worth keeping this step in context.
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The spike occurred at a minimum-to-$ 60 per-bail range after a few months of oil trade. In addition, the feeling of oil turned negative after a slow economic growth approach (due to tariff escalation and ongoing geopolitical stresses) and the decision to increase the production of OPEC.
WTI crude oil spot price Data by Ycharts
There is no doubt that Bhavna became negative after events in the spring. For example, Viters cut their planned capital expenditure by 32% and “postponed a couple of wells in response to the instability of the current commodity value to preserve the returns and maintain financial flexibility. “Diamondback cut its employed 2025 capital expenditure from $ 3.4 billion to $ 3.8 billion to $ 3.8 billion to $ 4.2 billion to $ 4.2 billion to $ 3.8 billion.
While Davon did not make any adjustment regarding the atmosphere of commodity value, the management said, “With the ongoing market and volatility, the Devon Macro will continue to monitor the environment and is a significant flexibility to adjust its activity and capital programs on its early release in early May.
What happened after the recent oil price spike
According to several reports, the attack on Iran on 13 June introduced a record amount of hedging volume through aesis hedging solutions. This company assists commodity companies with their hedging strategies. Although some of these oil companies were probably looking for potentially exposure to high prices, it is likely that it was independent oil companies taking advantage of spikes to hedge the production of their near period.
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As we have already seen, all three companies have either cut the plan to spend their capital or are monitoring events with the option to do so. In addition, they all use hedging as an integral part of their capital allocation strategy, ensuring returns to investors through dividends and share buybacks.
Hedging strategies and dividends
However, we will not ensure that until they release their second quarter earnings, there are all three strong candidates who participate in the crowd to hedge their oil production.
Hedging is an integral part of the strategy of the vits, which enables it to maintain its $ 2.25-shyer dividend (current yield: 10%). By the end of March, Viters had a hedge of 61% of its remaining oil production at an average price of $ 70.75 per barrel. Look at that figure to increase, or at least 2026 production versions have increased.
Diamondback is a conservative -run oil company that uses hedging to ensure its base dividend of $ 4 per share (currently equal to a yield of 2.9%). By May, it had negative security instead of $ 55 per barrel. In other words, at any cost of oil above $ 55, diamondback is in reverse for the price of oil.
In addition to the strategy base dividend, a variable is to enable investors to return through dividends or share buybacks. Again, look for diamondback to increase hedging activity in the quarter.
According to the first quarter, Davon Energy had more than 25% expected of 2025 oil production. With hedging at that place, management estimates that it will produce $ 50 per barrel at a price of $ 1.9 billion in FCF, $ 2.6 billion at $ 2.6 billion per barrel and $ 3.3 billion at $ 70 per barrel. These figures easily cover their fixed dividend of $ 0.96 per share (about $ 650 million cash). With increased hedging in the place, the fixed dividend (currently about 3%yield) will be even more secure.
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Stock to buy for investors in search of passive income
In particular, dividends of diamondback and Devon look very safe, and both have the ability to increase their discretionary dividends, make more share buybacks or pay loans. If I am right, and they, and vits, avail the price of oil, inactive income investors may also sleep in this knowledge that their dividend income is secured.
