We recently compiled a list of the 13 Best Natural Gas and Oil Dividend Stocks To Buy. In this article, we are going to take a look at where Permian Resources Corporation (NYSE:PR) stands against the other natural gas and oil dividend stocks.
The United States of America is the Largest Oil Producing Country in the World. The country’s oil production has surged by almost 50% over the last decade, reaching just over 13.45 million barrels per day (bpd) in October 2024. However, despite the historically high levels of output, total US production growth has slowed in recent years, climbing only about 280,000 bpd last year. The US Energy Information Administration (EIA) has forecasted the country’s crude oil production to flatten in 2026, with operators reducing the number of active drilling rigs as crude oil prices fall, allowing natural declines in existing wells to overtake production from new wells next year. The EIA expects US crude production to reach an all-time high in 2025, averaging 13.5 million bpd, increasing slightly to 13.6 million bpd in 2026.
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The US natural gas output also stands near an all-time high as a period of strong demand and improved prices sparked a resurgence in production. The EIA expects these prices to further increase in 2025 and 2026 as demand for natural gas is projected to grow mainly due to a jump in LNG exports. The country’s natural gas sector is also set to benefit greatly from the ongoing AI boom, as several dozen new gas-fired power plants are expected to be built in the US in the next few years. According to energy data provider Enverus, a total of 80 new gas power plants could be constructed in America by 2030, adding about 46 GW of new capacity – 20% higher than the gas capacity additions in the last five years.
President Donald Trump has made repeated calls to the American oil and gas sector to increase production as he holds the fossil fuel industry as a centerpiece of his broader economic mission. However, the country’s O&G majors are reluctant as increasing output even further could create a glut and drive prices down, which they want to avoid.
Instead, producers are focused on keeping their capital spending under control and attaining higher operational efficiencies, while prioritizing returning cash to shareholders after a pricing rout in the last decade hurt profits and share prices. Several oil bigwigs have even had to resort to borrowing money to make sure they keep their shareholders happy. According to a report by Janus Henderson, companies in the energy sector distributed over $49 billion in dividends during the third quarter of 2024, up from $32.2 billion three years ago. However, maintaining such high payouts to shareholders will get even tougher for the oil majors in the future, as the EIA expects Brent crude oil prices to fall 8% to average $74 a barrel in 2025, then fall further to $66 a barrel in 2026.
The energy sector has witnessed considerable fluctuations over the last few months, rising by over 6% in November before falling almost 10% in December. The broader energy sector ended 2024 with a return of just 5.72%, significantly lagging behind gains of 25% by the wider market.
To collect data for this article, we observed various companies working in the oil and gas sector and then picked out companies with the highest dividend yields as of February 6, 2025, and ranked them by their number of hedge fund investors according to the Insider Monkey database as of Q3 2024. Following are the Best Natural Gas and Oil Dividend Stocks to Buy Now.
At Insider Monkey we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A close-up of a wellhead, showing off the company’s production of oil and natural gas.
Number of Hedge Fund Holders: 56
Dividend Yield: 4.97%
Permian Resources Corporation (NYSE:PR) is an independent oil and natural gas company with operations focused in the Permian Basin, with assets concentrated in the core of the Delaware Basin.
Permian Resources Corporation (NYSE:PR) successfully closed its $818 million Barilla Draw acquisition last year, increasing its output by about 24,000 barrels of oil equivalent per day. The deal also added about 27,500 net acres to the company’s footprint in the Permian Basin, which is the largest shale oil belt in the world. The oil producer stated that the bolt-on deal acreage is well-situated for economic, long-lateral development and proximity to the company’s existing acreage enables ‘seamless integration, driving meaningful operational synergies’.
Permian Resources Corporation (NYSE:PR) continued the efficient development of its core Delaware Basin acreage position in Q3 2024, as it beat expectations with oil production of 161,000 barrels of oil per day and total production of 347,000 barrels of oil equivalent per day. Moreover, the company also continued to drive operational efficiencies and its drilling and completion costs per lateral foot were approximately $800 during the quarter, a $150 per lateral foot reduction from the previous year. Thanks to these encouraging results, the company increased its full year production guidance for the third consecutive quarter in Q3. Moreover, PR ended the quarter with almost $2.8 billion of liquidity and announced a quarterly base dividend of $0.15 per share, a 150% increase compared to the prior quarter.
Following an impressive Q3, Aristotle Capital Boston, LLC, stated the following about Permian Resources Corporation (NYSE:PR) in its Q3 investment letter:
“Permian Resources Corporation (NYSE:PR) is a Texas-based oil & gas exploration & production company with a large acreage position and deep inventory of high return potential drilling locations in the core of the Permian Basin. We expect management to continue to execute on its strategy of optimizing returns, diligently allocating capital to new opportunities, and returning excess capital to shareholders.”
Overall PR ranks 4th on our list of the best natural gas and oil dividend stocks to buy. While we acknowledge the potential for PR as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than PR but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
oil production, Natural Gas, crude oil prices, Permian Basin, Oil Dividend Stocks
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