Stock Market Correction: 2 High-Yield Dividend Stocks to Buy Now

The stock market has been on a rollercoaster ride in 2025, with the S&P 500 crossing into correction territory in early March. The market’s decline appears to reflect uncertainty surrounding new Trump administration tariff policies and growing economic concerns. As the market volatility continues, investors are looking for stable income streams, and high-yield dividend stocks are becoming an attractive option. Let's dive into two high-yield dividend stocks that could be worth considering in this uncertain market environment.

Vitesse Energy (VTS): A Unique Energy Play

Vitesse Energy is an energy company that owns financial interests, mainly as a non-operator, in oil and gas wells drilled by leading U.S. operators. The company recently completed the acquisition of Lucero Energy, which is expected to increase dividends and provide additional liquidity. Vitesse's business model involves owning and acquiring mineral and royalty interests in oil-weighted basins, mainly the Bakken.

Vitesse Energy announced a quarterly dividend of $0.5625 per share, payable on March 31, 2025, marking a 7% rise from the prior quarter. The company offers a dividend yield of 9.3%. Jefferies analyst Lloyd Byrne noted that the Q4 EBITDA modestly lagged the consensus estimate due to marginally lower-than-expected production and one-time costs related to the Lucero acquisition. However, Byrne highlighted that the Lucero deal adds to the company's operated production in the Bakken and nearly 25 net locations, which Vitesse believes equates to about 10 years of inventory life.

In the context of the ongoing market correction, Vitesse Energy's acquisition of Lucero Energy and the expected increase in dividends provide a positive outlook. The company's strategy of raising its payout as the expected operating cash flow grows and its plan to keep the dividend coverage ratio at about 1.0x suggest that Vitesse is well-positioned to weather the market correction.

Viper Energy (VNOM): A Reliable Dividend Payer

Viper Energy is an oil and gas company that is a subsidiary of Diamondback Energy (FANG). It focuses on owning and acquiring mineral and royalty interests in oil and gas properties in North America, primarily in the Permian Basin. Viper's business model involves returning about 75% of all distributable cash flow to shareholders through base and variable dividends and share buybacks.

Viper Energy announced a base cash dividend of 30 cents per share and a variable cash dividend of 35 cents per share for the fourth quarter of 2024. The total Q4 2024 capital return of 65 cents per share represents 75% of the cash available for distribution. JPMorgan analyst Arun Jayaram reiterated a buy rating on VNOM stock but lowered the price target to $51 from $56 as part of an update to his firm's exploration and production models. Jayaram highlighted Viper's policy of returning about 75% of all distributable cash flow to shareholders through base and variable dividends and share buybacks.

Viper Energy's relationship with Diamondback Energy, which operates a major portion of Viper's acreage, provides visibility and reduces a key uncertainty that is usually associated with companies in the minerals space. This relationship, along with Viper's policy of returning a significant portion of its distributable cash flow to shareholders, makes it an attractive option for investors seeking stability during the market correction.

Key Differences and Financial Health

While both Vitesse Energy and Viper Energy offer high-yield dividends and operate in the energy sector, their business models and financial health differ. Vitesse Energy's recent acquisition and focus on the Bakken basin, along with its strategy of increasing dividends as operating cash flow grows, make it a strong contender in the current market correction. Viper Energy, on the other hand, benefits from its relationship with Diamondback Energy and its policy of returning a significant portion of its distributable cash flow to shareholders, providing investors with a stable income stream during uncertain times.



Conclusion

In summary, the current economic conditions and market volatility make high-yield dividend stocks an attractive option for investors seeking stable income streams. However, investors should carefully evaluate the dividend yield, payout ratio, financial health indicators, industry position, growth prospects, and analyst recommendations when considering these opportunities. Vitesse Energy and Viper Energy are two high-yield dividend stocks that offer compelling opportunities in the current market environment. As always, do your own research and consider consulting with a financial advisor before making any investment decisions.