Vermilion Energy (TSX:VET) Is Up 11.1% After Dividend Hike and Q3 Growth – What's Changed

• On November 5, 2025, Vermilion Energy Inc. reported third-quarter earnings with revenue rising to CA$437.14 million, production reaching the high end of guidance, and a planned 4% increase to its quarterly dividend effective Q1 2026, backed by sizable investment in North American and European gas assets for 2026.
• An important insight is that the company reduced net debt by more than CA$650 million since Q1 2025, highlighting enhanced financial flexibility to support its development and return-of-capital priorities.
• We'll look at how Vermilion's upcoming dividend increase and expanded capital plan influence its longer-term investment narrative.

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Vermilion Energy Investment Narrative Recap

To believe in Vermilion Energy as an investment, you need to have conviction in its ability to deliver operational growth through disciplined capital deployment, particularly in global natural gas projects, while successfully integrating recent acquisitions. While the Q3 update marked progress with revenue growth and a 4% dividend increase, short-term earnings remain under pressure from lower net income, and execution on new drilling projects and debt reduction will continue to be the primary driver and risk. The immediate impact of the results does not materially shift this risk-reward balance.

Among the recent announcements, the planned CAD 415 million investment into Montney and Deep Basin gas assets for 2026 is particularly relevant. This initiative is directly tied to Vermilion’s key growth catalyst, expanding production to generate stronger free cash flow, which underpins its return-of-capital plan and supports further dividend growth.

But with growing capital commitments contrast the need for measurable returns on these projects, which investors should be aware of, especially if...

Read the full narrative on Vermilion Energy (it's free!)

Vermilion Energy is forecast to reach CA$2.1 billion in revenue and CA$20.0 million in earnings by 2028. This outlook is based on a 4.9% annual revenue growth rate and an earnings increase of CA$54.1 million from the current earnings of CA$-34.1 million.

Uncover how Vermilion Energy's forecasts yield a CA$13.50 fair value, a 15% upside to its current price.

Exploring Other Perspectives

Five members of the Simply Wall St Community estimate Vermilion’s fair value anywhere from CA$10.50 to CA$28.18 per share. Given recent earnings volatility, your own assessment of project execution risk could set your outlook apart from other investors.

Explore 5 other fair value estimates on Vermilion Energy - why the stock might be worth 10% less than the current price!

Build Your Own Vermilion Energy Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Vermilion Energy research is our analysis highlighting 2 key rewards and 4 important warning signs that could impact your investment decision.
• Our free Vermilion Energy research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Vermilion Energy's overall financial health at a glance.

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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.

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