Vitesse Energy's Dividend at Risk, Diamondback Energy Offers Better Investment Value
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jan 22 2026
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Source: NASDAQ.COM
- Dividend Risk: Vitesse Energy's dividend yield of 11.7% is at risk as 60% of its 2025 oil production is unhedged below $70, which could jeopardize investor confidence if oil prices decline significantly.
- Diamondback's Advantage: With a base dividend of $4 per share and a current yield of 2.6%, Diamondback Energy's protection down to $37 per barrel allows it to maintain stable capital returns even in falling oil price scenarios, enhancing its investment appeal.
- Business Model Divergence: Vitesse Energy's acquisition of Lucero Energy and its operation of 10% of its assets diverges from its original non-operator strategy, potentially indicating management's struggles in finding viable non-operating investments.
- Cash Flow Forecast: Diamondback's projected free cash flow per share ranges from $19 to $21 in 2025, and its flexible capital return policy, coupled with strong cash flow generation at the current oil price of $59, positions it as more resilient amid market fluctuations.
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Analyst Views on FANG
Wall Street analysts forecast FANG stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for FANG is 179.35 USD with a low forecast of 150.00 USD and a high forecast of 219.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
21 Analyst Rating
20 Buy
1 Hold
0 Sell
Strong Buy
Current: 160.270
Low
150.00
Averages
179.35
High
219.00
Current: 160.270
Low
150.00
Averages
179.35
High
219.00
About FANG
Diamondback Energy, Inc. is an independent oil and natural gas company, focused on the acquisition, development, exploration and exploitation of unconventional, onshore oil and natural gas reserves primarily in the Permian Basin in West Texas. The Company's activities are primarily directed at the horizontal development of the Wolfcamp and Spraberry formations in the Midland Basin and the Wolfcamp and Bone Spring formations in the Delaware Basin within the Permian Basin. Its subsidiary, Viper Energy, Inc., is focused on owning and acquiring mineral interests and royalty interests in oil and natural gas properties primarily in the Permian Basin and derives royalty income and lease bonus income from such interests. The Company has approximately 859,203 net acres, which primarily consists of 742,522 net acres in the Midland Basin and 116,681 net acres in the Delaware Basin. Its subsidiaries include Diamondback E&P LLC, Rattler Midstream GP LLC, Rattler Midstream LP and QEP Resources, Inc.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Utilities Sector Lags with Atmos Energy Down 1.9% Amidst Market Trends
- Utilities Sector Performance: The utilities sector is the worst performer in afternoon trading on Thursday, up only 0.1%, with Atmos Energy and Entergy showing losses of 1.9% and 1.1%, indicating weakness in this sector.
- ETF Performance Analysis: The Utilities Select Sector SPDR ETF, which tracks utility stocks, is up 0.2% on the day and 0.98% year-to-date, while Atmos Energy is down 1.46% year-to-date, highlighting a disparity between individual stocks and the ETF.
- Energy Sector Dynamics: The energy sector also shows weakness, up 0.1%, with APA Corp and Diamondback Energy down 3.7% and 1.9%, respectively, reflecting cautious market sentiment towards energy stocks.
- ETF Comparison: In contrast to the utilities ETF, the Energy Select Sector SPDR ETF is up 0.3% on the day and 9.32% year-to-date, indicating relative strength in energy stocks despite individual poor performances like that of Diamondback Energy.
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Diamondback Energy Offers Better 2026 Investment Outlook Than Vitesse Energy
- Business Model Comparison: Vitesse Energy diversifies risk by investing in over 7,600 wells, currently offering an 11.7% dividend yield, but its shift from a non-operator model may jeopardize future earnings.
- Diamondback's Advantage: Focused on the low-cost Permian Basin, Diamondback estimates a free cash flow of $20 per share at a $60 oil price in 2025, indicating strong capital return potential.
- Risk Management Strategy: Vitesse has 60% of its 2025 oil production hedged at nearly $70, with 40% unprotected, posing a dividend risk if oil prices decline.
- Flexible Capital Return Policy: Diamondback's capital return policy is flexible, offering a base dividend and opportunistic buybacks, ensuring stable shareholder returns amid oil price fluctuations.
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