1 Stock I'd Buy Before Vitesse Energy in 2026

Core Viewpoint - The prospects of oil and gas exploration and production companies are closely tied to oil prices, with Diamondback Energy being a more favorable investment compared to Vitesse Energy in 2026 due to differing business models and operational strategies [1]. Group 1: Vitesse Energy - Vitesse Energy operates as a non-operator, investing in various wells in the Bakken area, effectively functioning as a Bakken exchange-traded fund (ETF) [3]. - The company has interests in over 7,600 wells operated by larger firms, utilizing a proprietary data system to identify investment opportunities [3]. - Vitesse Energy's business model diversifies risk across multiple wells and employs a flexible hedging strategy to mitigate downside exposure to declining oil prices, with a current dividend yield of 11.7% [4]. Group 2: Diamondback Energy - Diamondback Energy focuses on the more productive Permian Basin and is recognized as one of the lowest-cost oil producers in the industry [5]. - The company offers a base dividend of $4 per share, yielding 2.6%, which is protected down to an oil price of $37 per barrel, with hedges starting to protect at $50 per barrel [5]. - Diamondback's capital return policy is flexible, including a base dividend, opportunistic share buybacks, and a variable dividend, with strong free cash flow estimates indicating robust capital return capabilities at current oil prices [6][9]. Group 3: Comparison and Risks - Vitesse Energy's recent acquisition of Lucero Energy, leading to the operation of 10% of its own assets, deviates from its original non-operating model, suggesting potential challenges in finding non-operating investments [10]. - Diamondback Energy's lower breakeven costs and flexible capital returns position it more favorably compared to Vitesse Energy, especially in a fluctuating oil price environment [8].