Oil prices are in the headlines again as Iran links reopening the Strait of Hormuz to US concessions, and that ripples straight through inflation expectations, interest rate worries, and energy sector stocks. For investors, these kinds of shocks can reshuffle winners and laggards quickly. This article walks through how this backdrop connects to three large cap energy stocks in our screener that appear positively exposed to the latest Hormuz story.

The stocks in the article below are just a starting sample, and the full screen surfaced 46 more large cap energy companies with equally compelling narratives that are not covered here. To go deeper, identify your own shortlist and analyze potential opportunities across the sector. Head straight into the Energy Sector Stocks screener.

Viper Energy (VNOM)

Overview: Viper Energy is a Midland based company that owns and acquires mineral and royalty interests over oil and gas producing acreage in the Permian Basin, collecting a share of production revenue without directly operating wells. Formed in 2013 and now a subsidiary of Diamondback Energy, it functions as a pure play way to get exposure to Permian drilling activity and commodity prices.

Operations: Viper Energy generates its revenue of about $1.9b primarily from acquiring oil and natural gas properties in the United States.

Market Cap: $14.7b

Oil price spikes linked to the Strait of Hormuz debate feed straight into the economics of mineral and royalty owners, which is why Viper Energy is on many investors’ radar right now. The company is tightly linked to Permian development, backed by Diamondback, and has been reshaping itself through large deals like Sitio and Riverbend, alongside a richer dividend framework and regular buybacks. At the same time, profit margins have compressed sharply, one off losses are large, the P/E is very high and the board and management bench are relatively new. This raises the risk bar. Investors who are focused on yield and oil leverage but can accept higher volatility and governance questions may find Viper to be worth a closer look.

Viper Energy’s royalty model, high P/E and fresh leadership team may point to a story investors are not pricing correctly yet. Start with the 3 key rewards and 4 important warning signs (1 is major!) to help reframe how you view its potential upside and vulnerability.

Build your own Viper Energy style shortlist

Viper Energy and the two other stocks in this article all came from a single screener, but the real value is in shaping filters around what matters most to you. Use our flexible Screener to mix valuation, growth, balance sheet and dividend filters, or start with one of our ready made Investing Ideas.

Baytex Energy (TSX:BTE)

Overview: Baytex Energy is a Calgary based oil and gas producer that acquires, develops, and produces light and heavy crude oil, condensate, natural gas liquids, and natural gas, with core operations in the Western Canadian Sedimentary Basin and additional exposure to the Eagle Ford in the United States.

Operations: Baytex Energy generates about CA$1.7b in revenue from oil and gas exploration and production, almost entirely from its Canadian operations.

Market Cap: CA$4.1b

Baytex Energy stands out in this Hormuz driven oil story because it is heavily tied to crude prices and has been working to turn operational efficiency gains into stronger cash generation. Recent results showed higher production, rising net cash after an asset sale, and ongoing share buybacks alongside dividends, which together point to a shareholder friendly capital return plan. At the same time, Baytex is still working through a period of losses, carries higher risk funding, and has seen insiders selling, so the path is not without bumps. If you are comfortable with commodity exposure and want a producer that is actively reshaping its portfolio and returns policy, Baytex is worth keeping on the radar.

Baytex Energy is reshaping its portfolio and capital returns, yet the full story of its trade off between cash generation and risk is easy to miss. Get the fuller picture in the 2 key rewards and 1 important warning sign

Talos Energy (TALO)

Overview: Talos Energy is a Houston based oil and gas company focused on offshore exploration and production in the Gulf of Mexico and offshore Mexico, with an additional business developing carbon capture and sequestration projects.

Operations: Talos Energy generates about US$2.0b in revenue from its Upstream segment, with essentially all sales coming from the United States.

Market Cap: US$2.4b

Talos Energy sits at the intersection of higher oil prices linked to the Strait of Hormuz story and growing demand for reliable offshore supply, which is why many investors are paying attention. The company is leaning into high margin Gulf projects, reported record adjusted free cash flow in Q2 2026, and has liquidity of about US$1.2b with leverage around 0.5x. Together, these factors give it room to keep developing new fields and pursue deals such as the Block 29 farm in offshore Mexico. At the same time, Talos is still exposed to Gulf specific risks such as hurricanes, regulatory shifts and decommissioning costs, and it remains heavily tied to oil. For investors who can accept those trade offs, the mix of offshore projects, carbon capture exposure and current valuation metrics could make Talos worth closer inspection.

Talos Energy’s offshore cash engine and its carbon capture side story could be shaping a very different growth profile than many investors assume. Get a clearer view of where expectations and reality diverge in the analyst forecasts for Talos Energy.

Seeking Fresh Alternatives Before Others Catch On

New stock ideas can move quickly. Some are close to a breakout, others are quietly building momentum under the radar for now. Instead of reacting late, consider acting early based on your own research and judgment.

• Look for companies with solid cash generation before they are widely discussed by scanning the curated 52 high quality undervalued stocks while it still appears under the radar.
• Explore long-term income themes by reviewing companies in the curated 8 dividend fortresses while yields and balance sheets still appear attractive to patient investors.
• Research the next infrastructure leg by examining companies in the focused 37 power grid technology and infrastructure stocks while the story is still developing for many investors.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.