Oil prices have soared more than 67% this year, including rallying by double digits in October. While crude prices have come off their recent highs, they're above $80 a barrel. And oil stocks are cashing in since most set their businesses to run on sub-$50 oil prices this year. 

Three oil companies thriving in the current market are ConocoPhillips (NYSE:COP)Devon Energy (NYSE:DVN), and Diamondback Energy (NASDAQ:FANG). Here's why that makes them stand out as top oil stocks to buy this month.

People near an oil well with the sun rising in the background.

Image source: Getty Images.

Adding fuel to an already high-powered plan

ConocoPhillips recently reported excellent third-quarter results. The oil giant generated $4.1 billion of cash from operations during the third quarter. After covering its $1.3 billion in capital expenses, ConocoPhillips produced $2.8 billion in free cash flow. 

The company continues to return the bulk of its excess cash flow to shareholders. To date, it has sent $4 billion back to investors, including $2.2 billion of share repurchases and $1.8 billion in dividends. That has it on track to return $6 billion in cash to investors this year. It recently took another step toward achieving that goal by increasing its dividend by 7%. 

ConocoPhillips ended the quarter with $10.9 billion in cash and short-term investments. It expects to use the bulk of that money to buy Shell's (NYSE:RDS.A)(NYSE:RDS.B) assets in the Permian Basin. It agreed to pay $9.5 billion in cash for that business, which will enhance its ability to produce free cash flow. ConocoPhillips now estimates it can generate a cumulative $80 billion in free cash flow over the next decade, assuming oil averages $50 a barrel, $10 billion above its prior forecast. Meanwhile, it has lots of upside to higher oil prices. Over the next decade, every $10 change in oil prices can boost its cash flow by $35 billion. That ability to cash in on higher crude prices makes ConocoPhillips stand out as a top-tier oil stock.

Paying immediate dividends

Devon Energy is also cashing in on higher crude prices. In the third quarter, the company generated $1.6 billion of operating cash flow, 46% above the previous quarter. Meanwhile, its free cash flow has increased eight-fold from the end of last year, hitting $1.1 billion in the third quarter. 

Devon is returning the bulk of that money to shareholders. It launched a fixed-plus variable dividend strategy earlier this year. Its surging cash flow enabled the company to boost its total dividend outlay by 71% during the third quarter. In addition, Devon recently launched a $1 billion share repurchase program, big enough to retire 4% of its current share count. The company expects its free cash flow to continue growing over the next few quarters as it benefits from cost reductions and the roll-off of legacy oil hedges. That should enable the company to continue returning a large portion of its growing cash flow gusher to shareholders.  

Holding the line to continue cashing in on crude

Diamondback Energy also recently reported strong quarterly results. It produced $740 million in free cash flow during the third quarter, pushing its year-to-date total to $1.65 billion. The company used most of that cash to repay debt -- it's down $1.3 billion this year -- and increase its dividend. Diamondback has given investors three raises this year, totaling 33%. 

Meanwhile, with debt repayment strengthening its balance sheet, Diamondback Energy is ready to return even more cash to shareholders. The company said it plans to keep its oil production flat next year to maximize its free cash flow. It expects to return half that money to shareholders through a combination of share repurchases and variable dividend payments. Those cash returns could enable Diamondback to produce strong total returns in the coming year if oil prices cooperate.

Returning the gusher to shareholders

ConocoPhillips, Devon Energy, and Diamondback Energy are all producing prodigious amounts of cash these days. Instead of using that gusher to drill more wells and grow their production, all three plan to return the bulk of that windfall to shareholders via dividends and share repurchases. Those cash returns could enable these oil stocks to produce attractive total returns, making them stand out as the top ones to buy this November.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.