Diamondback Just Raised Its Dividend 7.3%. These 3 Energy Stocks Are Paying Investors Too

Oil and gas producers are using their earnings reports to send cash back to shareholders. In the past week, a Permian driller, its royalty affiliate, the largest US natural gas producer, and a Canadian oil sands major all reported results. Each one paired those results with a new dividend declaration funded by free cash flow. Diamondback Energy (NASDAQ:FANG | FANG Price Prediction) led the way by raising its base quarterly dividend 7.3%. Viper Energy (NASDAQ:VNOM), Expand Energy (NASDAQ:EXE), and Canadian Natural Resources (NYSE:CNQ) followed, with payouts their cash flow covers comfortably. Below is a safety check on each one.

Diamondback Energy: A Bigger Base Dividend With Plenty of Cushion

Diamondback’s new base dividend is $1.18 per share each quarter, or $4.72 annualized, up from $4.40. The trailing yield is 2.26%. At the current price of $183.17, the new rate works out to a forward yield of about 2.58%. That yield is modest, but few in the sector are better covered.

Dividend safety: Third-quarter free cash flow came in at $2.15 billion after $1.03 billion of capex. The higher dividend costs roughly $330 million a quarter, so that free cash flow covers it about 6.5 times. Net debt to EBITDA is 1.48x, and interest coverage is 20.16x. CEO Kaes Van’t Hof said consolidated debt fell by about $4 billion over the past year. He called the base dividend “well protected below $40-a-barrel oil price.”

Track record: The base payout climbed from $0.90 in late 2024 to $1.00 in every quarter of 2025. In 2026, it stepped up to $1.05, then $1.10, and now $1.18. Large variable payouts, as high as $3.37 in 2023, have since been replaced by a growing base dividend plus buybacks.

Bull case: Adjusted EPS of $5.86 beat the $5.60 consensus. Oil output of 525 MBO/d came in above the guidance midpoint. Diamondback repurchased 1.35 million shares for about $251 million and has roughly $9.9 billion left on its authorization. The stock trades at a forward P/E of 9 and a free cash flow yield near 10.2%. Van’t Hof said the base dividend is the company’s “number one decision.”

Risk: All of Diamondback’s production is in the Permian. That exposes it to local rules such as the Texas Railroad Commission’s water disposal moratorium.

Viper Energy: Royalty Cash Flow With No Drilling Bill

Viper works differently from the producers on this list. It owns mineral and royalty interests, so it collects a share of production revenue while operators such as Diamondback pay to drill the wells. The company declared a base dividend of $0.50 per Class A share, or $2.00 annualized. Annualizing the prior quarter’s $0.67 payout gave an indicated $2.68. That figure now overstates the run rate, because Viper raised its base dividend 32% and dropped its old pledge to pay out at least 75% of cash available for distribution. The trailing yield is 5.18%, and the new base yields about 4.99% at $40.08. That makes it a high-yield name with a fixed base check.

Dividend safety: Viper produced $520 million of free cash flow in the quarter, a 79% margin. Management says the $2.00 base is “fully protected down to approximately $30 per barrel WTI” and uses about 50% of cash available for distribution at $70 WTI. Viper has paid a distribution every quarter since 2014, but the old variable structure let payments drop as low as $0.03 in 2020. The new fixed base is designed to stop that kind of swing.

Bull case: EPS of $0.72 beat the $0.66 estimate, and revenue rose 58.1% from a year earlier. Fourth-quarter oil guidance of 70,000 to 71,000 bo/d is above third-quarter output of 69,076 bo/d. Van’t Hof’s stated goal is to “pay a very high base dividend that’s competitive with the top dividend payers across our space, the majors combined with even a utility, but let’s beat that with growth on top.”

Risk: Viper is paying for the McElroy Ranch ($529 million), and Buckhorn deals mostly in cash. That pushes pro forma year-end net debt to about $2.4 billion, or roughly 1.0x EBITDA.

Expand Energy: A Steady Base Dividend Tied to Gas Demand

Expand Energy pays $0.575 per share each quarter, an indicated $2.30 a year, for a yield of 2.56%. Every recent declaration has held at $0.575, with occasional variable top-ups such as the $1.465 payment in 2025. Income investors should think of it as a dependable flat base dividend and leave out any expectation of a long raise streak.

Dividend safety: Third-quarter free cash flow was $339 million. The dividend costs about $133 million a quarter, so free cash flow covered it roughly 2.6 times. Net debt is $4.7 billion, and leverage is 0.8x. CFO Marcel Teunissen ranked the dividend second among capital priorities, behind only drilling and completion spending. He put the cash breakeven, including dividends, at “about $2.80 per Mcf.”

Bull case: Adjusted EPS of $1.46 beat the $1.32 consensus, the company’s fourth consecutive quarterly beat. Buybacks so far this year total about $900 million, or about 4% of shares. Expand Energy closed its Twin Eagle marketing acquisition in September. Management expects that business to push the cash breakeven down to about $2.60 by 2028. The company is 55% hedged for 2027 at around $3.65. Shares are down 21.32% this year and trade at a trailing P/E of 8.

Risk: NYMEX gas averaged $2.95, against $3.07 a year earlier. That leaves only a thin cushion above the $2.80 breakeven if prices fall further.

Canadian Natural Resources: 26 Years of Raises and Ramped-Up Buybacks

Canadian Natural Resources declared a quarterly dividend of C$0.625 per share with its third-quarter results today. It is payable January 5, 2027. The dividend is set in Canadian dollars, so the amount US holders receive moves with the exchange rate. The trailing yield in US dollar terms is 4.52%.

Dividend safety: Canadian Natural reached its C$13 billion net debt target ahead of plan and ended the quarter at about C$12.1 billion. Under its policy, that shifts buybacks to 100% of free cash flow. The company now targets C$800 million of repurchases a month in November and December. Adjusted funds flow was about C$5.5 billion, and the WTI breakeven sits in the low-to-mid US$40s. CFO Victor Darel said 2026 marks the “26th consecutive year of dividend increases” in Canadian dollars. Quarterly payments in the record go back to 2001. In US dollars, amounts fluctuate with currency swings and include occasional special payments.

Bull case: The company returned about C$10.6 billion to shareholders in the first nine months of the year. Production averaged about 1.65 million BOE per day, and thermal in situ output hit a record of about 300,000 barrels per day. The Horizon turnaround finished seven days ahead of schedule, which management expects to add about 23,000 barrels per day in the fourth quarter. The stock is up 49.64% this year at a trailing P/E of 12.

Risk: US investors take on currency risk on top of commodity risk. A weaker Canadian dollar shrinks the US dollar value of each payment even when the board raises the dividend.

Four Dividends That Cash Flow Already Covers

All four paid this quarter’s dividend from cash already generated, and each kept money for buybacks or debt reduction. Diamondback offers the best coverage, Viper has a base dividend built for $30 oil, Expand Energy pays a stable check backed by gas hedges, and Canadian Natural has 26 straight years of raises plus 100% of free cash flow going to buybacks. Viper shares slid 13.73% over the past week despite the raise. For readers building a portfolio where the checks keep coming without selling shares, we laid out a dividend ladder for lifelong income in a free guide here. Next, watch whether oil and gas prices stay above each company’s breakeven.

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