13 Best Natural Gas and Oil Dividend Stocks To Buy

6. Diamondback Energy, Inc. (NASDAQ:FANG)

Number of Hedge Fund Holders: 49

Dividend Yield: 5.18%

Diamondback Energy, Inc. (NASDAQ:FANG) is a Texas-based independent oil and natural gas company, focused on the acquisition, development, exploration, and exploitation of unconventional, onshore oil and natural gas reserves in the Permian Basin in West Texas. The company completed its merger with Endeavor Energy Resources last year, creating a leading operator focused on the Permian Basin, which accounts for nearly 40% of the oil production and 15% of the natural gas production in the United States.

Global crude oil prices fell about 6% in the October-December quarter compared to the previous three months, weighing down producers like Diamondback Energy, Inc. (NASDAQ:FANG). The company’s average realized prices, or the price it received for total oil production, declined to $69.48 per barrel during Q4 2024 against $73.13 per barrel in the preceding quarter, which is set to take a toll on its earnings. Diamondback’s average realized price for natural gas, however, surged by around 30%.

To strengthen its balance sheet and reduce debt after the $26 billion acquisition of Endeavor Energy Resources last year, Diamondback Energy, Inc. (NASDAQ:FANG) recently announced that it has entered into a definitive agreement to sell certain mineral and royalty interests to its subsidiary, Viper Energy, for a total transaction value of $4.45 billion. Diamondback has experienced six straight years of dividend growth and has a 5-year dividend CAGR of almost 49%. The company increased its share repurchase authorization to $6 billion in Q3 2024, demonstrating a commitment to returning capital to shareholders.