President Donald Trump ordered a 25% tariff on imports from Canada and a 10% tariff on energy products like crude oil (CLH25) (CBJ25) and natural gas (NGH25) from the country. Canadian oil makes up more than half of U.S. imports, shifting investor focus to domestic producers with healthy operations and pricing power. Investors anticipate that the Canadian tariffs will drive up costs for foreign oil while putting pressure on Midwest refiners that rely on these supplies.
In this environment, energy dividend stocks are getting more attention as a way to combine steady cash flow with shareholder-friendly returns. Analysts consider companies like Chord Energy (CHRD) and Diamondback Energy (FANG) top picks for 2025.
Chord Energy (CHRD)
Chord Energy (CHRD) was formed after the merger of Oasis Petroleum and Whiting Petroleum, making it a major player in the Williston Basin with operations in North Dakota and Montana.
The company focuses on low-cost oil and gas production, using extended-reach drilling and smart acquisitions to boost its scale and inventory. Its focus on the Bakken Basin gives it an edge by reducing reliance on Canadian imports — a big plus if Trump’s tariffs begin to disrupt energy supply chains.
The stock price has fallen 26% over the past 52 weeks, and shares are down just over 4% in the year to date.
Despite this volatility, the stock looks undervalued with a price-earnings ratio of 6.27x compared to the sector average of 12x and a market capitalization of $6.87 billion. Its low dividend payout ratio of 5.44% supports a sustainable forward yield of $0.76 per share.
In the third quarter of 2024, Chord showed strong performance with oil production of 158.8 thousand barrels of oil per day coming in at the high end of its guidance, $674.5 million in adjusted EBITDA, and $312.5 million in free cash flow. The company returned 75% of this free cash flow to shareholders through buybacks and dividends, including $146 million in repurchases.
Looking ahead, Chord plans to spend $1.4 billion annually from 2025 to 2027 to maintain steady production levels while benefiting from $200 million in synergies from its Enerplus merger.
Wall Street is optimistic about Chord’s future, with 16 analysts rating CHRD a consensus “Strong Buy.” The average price target of $172.44 suggests potential upside of 53.3% from current levels.
Diamondback Energy (FANG)
Diamondback Energy (FANG) is a major player in the oil and natural gas industry, with its operations mainly based in the Permian Basin, one of the most productive oil regions in the U.S.
The company has used its larger scale, following a merger with Endeavor, to handle potential tariff challenges while continuing to deliver healthy returns to its shareholders through dividends and stock buybacks.
FANG shares have gained just under 9% over the past 52 weeks and are down just over 0.2% in the year to date.
With a market value of $48 billion and a forward price-earnings ratio of 10.52x (lower than the industry average of 12x), Diamondback looks like a good deal compared to its peers, thanks to its strong earnings and cash flow.
The company’s focus on rewarding shareholders is clear from its 2.19% dividend yield and six straight years of dividend increases.
Diamondback’s financial strength was evident in its Q3 2024 results. The company generated $1.2 billion in operating cash flow and $1 billion in free cash flow after adjustments. Out of this, it returned $780 million to shareholders — 78% of its free cash flow — through $515 million in stock buybacks and a dividend paying $3.60 per share.
After merging with Endeavor Energy Resources in September 2024, Diamondback hit record production levels of 571,100 barrels of oil equivalent per day and increased its share repurchase authorization to $6 billion, showing confidence in its future growth.
The company continues to strengthen its position with new initiatives. Its partnership with Halliburton (HAL) and VoltaGrid to use electric simul-frac fleets shows a commitment to improving efficiency and sustainability in the Permian Basin. On top of that, its subsidiary Viper Energy (VNOM) recently acquired mineral and royalty interests, boosting Diamondback’s asset base and cash flow potential even further.
Wall Street analysts are very optimistic about Diamondback’s future. It has a consensus rating of “Strong Buy” and an average price target of $213.38, which suggests nearly 30% upside from current levels.
The Bottom Line
Chord Energy and Diamondback Energy stand out as smart picks for 2025, offering a mix of operational resilience, shareholder-focused returns, and undervalued growth potential. Whether it’s Chord’s disciplined capital allocation and Williston Basin dominance or Diamondback’s efficiency-driven Permian operations and sustainability initiatives, both stocks provide a solid hedge against uncertainty while positioning for long-term gains. For investors seeking stability with upside, these energy dividend plays are worth a closer look.
