Latest news with #DevonEnergy
Globe and Mail
3 days ago
- Business
- Globe and Mail
Prediction: These 3 High-Yield Oil Companies Just Secretly Moved to Secure Their Dividends
It's no secret that the market has lost interest in oil stocks over the past year. Indeed, all three stocks covered here -- namely, Devon Energy (NYSE: DVN), Diamondback Energy (NASDAQ: FANG), and Vitesse Energy (NYSE: VTS) -- have declined over the last year. As such, they now trade with excellent dividend yields or attractive price-to-free cash flow (FCF) multiples. Moreover, I think there's a strong possibility that all three companies have recently moved to reduce risk and secure their dividends. Here's why. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More » The oil price environment in the first half Israel's attack on Iran sent the price of oil spiking higher, as investors priced in the risk of ongoing instability in a critically crucial oil-producing region. However, before going into how oil companies responded to this, it's worth putting the move into context. The spike occurred after a few months of oil trading in the low-to-mid-$60 per-barrel range. In addition, sentiment toward oil turned negative following a slower economic growth outlook (due to tariff escalations and ongoing geopolitical tensions) and OPEC's decision to increase production. WTI Crude Oil Spot Price data by YCharts There's little doubt that sentiment turned negative after events in the spring. For example, Vitesse implemented a 32% cut in its planned capital expenditures and deferred completion of a couple of wells "in response to current commodity price volatility to preserve returns and maintain financial flexibility." Diamondback cut its planned 2025 capital expenditures to $3.4 billion to $3.8 billion from a previous range of $3.8 billion to $4.2 billion. While Devon didn't make any adjustments in connection with the commodity price environment, management noted, "With the ongoing market and price volatility, Devon will continue to monitor the macro environment and has significant flexibility to adjust its activity and capital programs" on its earnings release in early May. What happened after the recent oil price spike According to numerous reports, the attack on Iran on June 13 triggered a record amount of hedging volumes through Aegis Hedging Solutions. This company assists commodity companies with their hedging strategies. While some of it was possibly oil companies looking to get exposure to potentially higher prices, the likelihood is that it was independent oil companies taking advantage of the spike to hedge their near-term production. As we've already seen, all three companies have either cut their capital spending plans or are monitoring events with the option to do so. In addition, they all utilize hedging as an integral part of their capital allocation strategy, ensuring returns to investors through dividends and share buybacks. Hedging strategies and dividends While we won't know for sure until they release their second-quarter earnings, all three are strong candidates to have taken part in the rush to hedge their oil production. Hedging is an integral part of Vitesse's strategy, which enables it to maintain its $2.25-per-share dividend (current yield: 10%). As of the end of March, Vitesse had 61% of its remaining oil production hedged at an average price of $70.75 per barrel. Look for that figure to increase, or at least an increase in 2026 production volumes hedged. Diamondback is a conservatively run oil company that uses hedging to ensure its base dividend of $4 per share (currently equivalent to a yield of 2.9%). As of May, it had downside protection in place to $55 a barrel. In other words, at any price of oil above $55, Diamondback has upside exposure to the price of oil. The strategy is to enable cash flow to return to investors through a variable dividend or share buybacks, in addition to the base dividend. Again, look for Diamondback to have increased hedging activity in the quarter. As of the first quarter, Devon Energy had more than 25% of its expected 2025 oil production hedged. With that hedging in place, management estimates it will generate $1.9 billion in FCF at a price of oil of $50 per barrel, $2.6 billion at $60 per barrel, and $3.3 billion at $70 per barrel. These figures easily cover its fixed dividend of $0.96 per share (about $650 million in cash). With increased hedging in place, the fixed dividend (currently yielding almost 3%) will be even more secure. Stocks to buy for investors looking for passive income In particular, Diamondback's and Devon's dividends look very secure, and both have the potential to increase their discretionary dividends, make more share buybacks, or pay down debt. If I'm right, and they, and Vitesse, took advantage of the oil price spike, then passive income investors can sleep even sounder in the knowledge that their dividend income is safe. Should you invest $1,000 in Devon Energy right now? Before you buy stock in Devon Energy, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Devon Energy wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $713,547!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $966,931!* Now, it's worth noting Stock Advisor 's total average return is1,062% — a market-crushing outperformance compared to177%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of June 23, 2025
Yahoo
3 days ago
- Business
- Yahoo
Prediction: These 3 High-Yield Oil Companies Just Secretly Moved to Secure Their Dividends
Independent oil companies rushed to increase hedges during the recent oil price spike. These three companies are strong candidates to have done so, based on their existing hedging strategies. Increased hedging, at the right price, will reduce downside exposure to the price of oil and help secure dividends. 10 stocks we like better than Devon Energy › It's no secret that the market has lost interest in oil stocks over the past year. Indeed, all three stocks covered here -- namely, Devon Energy (NYSE: DVN), Diamondback Energy (NASDAQ: FANG), and Vitesse Energy (NYSE: VTS) -- have declined over the last year. As such, they now trade with excellent dividend yields or attractive price-to-free cash flow (FCF) multiples. Moreover, I think there's a strong possibility that all three companies have recently moved to reduce risk and secure their dividends. Here's why. Israel's attack on Iran sent the price of oil spiking higher, as investors priced in the risk of ongoing instability in a critically crucial oil-producing region. However, before going into how oil companies responded to this, it's worth putting the move into context. The spike occurred after a few months of oil trading in the low-to-mid-$60 per-barrel range. In addition, sentiment toward oil turned negative following a slower economic growth outlook (due to tariff escalations and ongoing geopolitical tensions) and OPEC's decision to increase production. There's little doubt that sentiment turned negative after events in the spring. For example, Vitesse implemented a 32% cut in its planned capital expenditures and deferred completion of a couple of wells "in response to current commodity price volatility to preserve returns and maintain financial flexibility." Diamondback cut its planned 2025 capital expenditures to $3.4 billion to $3.8 billion from a previous range of $3.8 billion to $4.2 billion. While Devon didn't make any adjustments in connection with the commodity price environment, management noted, "With the ongoing market and price volatility, Devon will continue to monitor the macro environment and has significant flexibility to adjust its activity and capital programs" on its earnings release in early May. According to numerous reports, the attack on Iran on June 13 triggered a record amount of hedging volumes through Aegis Hedging Solutions. This company assists commodity companies with their hedging strategies. While some of it was possibly oil companies looking to get exposure to potentially higher prices, the likelihood is that it was independent oil companies taking advantage of the spike to hedge their near-term production. As we've already seen, all three companies have either cut their capital spending plans or are monitoring events with the option to do so. In addition, they all utilize hedging as an integral part of their capital allocation strategy, ensuring returns to investors through dividends and share buybacks. While we won't know for sure until they release their second-quarter earnings, all three are strong candidates to have taken part in the rush to hedge their oil production. Hedging is an integral part of Vitesse's strategy, which enables it to maintain its $2.25-per-share dividend (current yield: 10%). As of the end of March, Vitesse had 61% of its remaining oil production hedged at an average price of $70.75 per barrel. Look for that figure to increase, or at least an increase in 2026 production volumes hedged. Diamondback is a conservatively run oil company that uses hedging to ensure its base dividend of $4 per share (currently equivalent to a yield of 2.9%). As of May, it had downside protection in place to $55 a barrel. In other words, at any price of oil above $55, Diamondback has upside exposure to the price of oil. The strategy is to enable cash flow to return to investors through a variable dividend or share buybacks, in addition to the base dividend. Again, look for Diamondback to have increased hedging activity in the quarter. As of the first quarter, Devon Energy had more than 25% of its expected 2025 oil production hedged. With that hedging in place, management estimates it will generate $1.9 billion in FCF at a price of oil of $50 per barrel, $2.6 billion at $60 per barrel, and $3.3 billion at $70 per barrel. These figures easily cover its fixed dividend of $0.96 per share (about $650 million in cash). With increased hedging in place, the fixed dividend (currently yielding almost 3%) will be even more secure. In particular, Diamondback's and Devon's dividends look very secure, and both have the potential to increase their discretionary dividends, make more share buybacks, or pay down debt. If I'm right, and they, and Vitesse, took advantage of the oil price spike, then passive income investors can sleep even sounder in the knowledge that their dividend income is safe. Before you buy stock in Devon Energy, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Devon Energy wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $713,547!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $966,931!* Now, it's worth noting Stock Advisor's total average return is 1,062% — a market-crushing outperformance compared to 177% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 23, 2025 Lee Samaha has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Vitesse Energy. The Motley Fool has a disclosure policy. Prediction: These 3 High-Yield Oil Companies Just Secretly Moved to Secure Their Dividends was originally published by The Motley Fool Sign in to access your portfolio
Yahoo
6 days ago
- Business
- Yahoo
Why Devon Energy (DVN) Outpaced the Stock Market Today
In the latest trading session, Devon Energy (DVN) closed at $32.48, marking a +1.09% move from the previous day. The stock outpaced the S&P 500's daily gain of 0.8%. Elsewhere, the Dow saw an upswing of 0.94%, while the tech-heavy Nasdaq appreciated by 0.97%. Shares of the oil and gas exploration company witnessed a gain of 4.12% over the previous month, beating the performance of the Oils-Energy sector with its gain of 3.8%, and underperforming the S&P 500's gain of 5.12%. The upcoming earnings release of Devon Energy will be of great interest to investors. The company's earnings report is expected on August 5, 2025. The company is expected to report EPS of $0.83, down 41.13% from the prior-year quarter. Simultaneously, our latest consensus estimate expects the revenue to be $4.02 billion, showing a 2.66% escalation compared to the year-ago quarter. For the full year, the Zacks Consensus Estimates are projecting earnings of $3.92 per share and revenue of $16.68 billion, which would represent changes of -18.67% and +4.67%, respectively, from the prior year. Investors should also take note of any recent adjustments to analyst estimates for Devon Energy. These latest adjustments often mirror the shifting dynamics of short-term business patterns. Therefore, positive revisions in estimates convey analysts' confidence in the business performance and profit potential. Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system. The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the past month, there's been a 0.08% fall in the Zacks Consensus EPS estimate. Devon Energy is holding a Zacks Rank of #3 (Hold) right now. Valuation is also important, so investors should note that Devon Energy has a Forward P/E ratio of 8.19 right now. This signifies a discount in comparison to the average Forward P/E of 10.49 for its industry. One should further note that DVN currently holds a PEG ratio of 2.39. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The average PEG ratio for the Oil and Gas - Exploration and Production - United States industry stood at 2.72 at the close of the market yesterday. The Oil and Gas - Exploration and Production - United States industry is part of the Oils-Energy sector. This industry currently has a Zacks Industry Rank of 167, which puts it in the bottom 33% of all 250+ industries. The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1. Make sure to utilize to follow all of these stock-moving metrics, and more, in the coming trading sessions. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Devon Energy Corporation (DVN) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
25-06-2025
- Business
- Yahoo
Oil Prices Are Spiking. 3 Top Oil Stocks to Buy to Cash in on Higher Crude Prices.
For better or worse, Devon Energy's financial performance is tied directly to oil prices. Oil and gas giant ConocoPhillips is enhancing its ability to cash in on crude prices. Higher oil prices are a boon for Chevron, which expects cash flows to rise. 10 stocks we like better than ConocoPhillips › Oil prices took a plunge earlier this year. WTI, the primary U.S. oil price benchmark, fell from its peak at above $80 a barrel to a low point of around $60 a barrel due to concerns that President Donald Trump's tariff plan would slow the economy and sap oil demand. However, crude oil has since spiked back into the mid-$70s due to tariff pauses, trade deals, and concerns about supply disruptions due to resurgent conflicts in the Middle East and between Russia and Ukraine. Rising oil prices will enable oil companies to produce more cash, making the sector look like a more compelling investment opportunity these days. ConocoPhillips (NYSE: COP), Devon Energy (NYSE: DVN), and Chevron (NYSE: CVX) currently stand out to a few contributing analysts as top oil stocks to buy amid the rise in crude prices. Reuben Gregg Brewer (Devon Energy): Energy prices are volatile, which is a simple fact of life in the energy sector. Companies go about dealing with this in different ways. For example, companies like integrated energy giant Chevron work to mitigate the risk by having diversified business models and strong balance sheets. Companies like Devon Energy, a pure-play energy producer, embrace the risk. To be fair, Devon Energy isn't speculating wildly in the hope of hitting the jackpot. It just focuses on controlling what it can by operating a strong energy production business. And it has done so fairly well, noting that it has an attractive break-even price, growing production, and an investment-grade-rated balance sheet. Management simply accepts that the revenue and earnings it generates will fluctuate over time, rising and falling alongside commodity prices. But the company's business model will likely be very attractive to investors looking to benefit from rising oil prices. Basically, Devon Energy is a long-term survivor in the volatile energy sector. And its financial performance will benefit directly from oil price rallies. Which, in turn, means its stock price will tend to rally alongside oil prices. Devon Energy is a higher-risk energy investment, but if you are looking for a way to cash in on higher crude prices, well, it could be a very good option for you. Matt DiLallo (ConocoPhillips): U.S. oil and gas giant ConocoPhillips has built one of the industry's deepest and most durable diversified portfolios. The company currently has decades of inventory, with a cost of supply that's less than $40 per barrel. That low cost of supply cushions its downside during periods of lower prices while enhancing its upside potential when crude oil prices spike. ConocoPhillips capitalized on the dip in oil prices earlier this year by finding additional opportunities to enhance its efficiency and reduce costs. It cut $500 million in capital spending and $200 million in operating costs without impacting its production guidance. Because of that, the company is in an even stronger position to cash in on the more recent uptick in crude prices. On top of its base business's improved cash flow, ConocoPhillips is about to reach a major inflection point, delivering robust multi-year free cash flow growth. Its longer-cycle investments in liquefied natural gas (LNG) and Alaska have it on track to produce an incremental $6 billion in annual free cash flow by 2029, assuming $70 oil (crude is currently closer to $75). That's a sector-leading free-cash-flow growth rate. With an already strong balance sheet, ConocoPhillips expects to return most of this windfall to shareholders. The oil giant plans to deliver dividend growth within the top 25% of companies in the S&P 500. It also plans to repurchase at least $20 billion worth of its stock over the next three years. The company's combination of low costs, visible growth, and enhanced shareholder returns makes it a top oil stock to buy in any environment. Neha Chamaria (Chevron): Since Chevron is primarily an oil and gas exploration and production company, the prices of crude oil and natural gas are the most significant factor affecting its earnings and cash flows. Chevron estimates that every $10 change in Brent crude price will affect its production by nearly 10,000 barrels of oil equivalent per day. Every $1 change in Brent crude price, meanwhile, can affect its after-tax earnings by nearly $450 million. Needless to say, a rising oil-price environment is hugely favorable for Chevron. Chevron stock moves largely in tandem with oil prices, and it has fallen alongside oil prices in recent weeks and is still trading down almost 10% in three months. Now's a great time to buy the stock, especially since Chevron is already on solid footing, and higher oil prices should drive its cash flows even higher. Chevron expects to generate $10 billion in incremental free cash flow (FCF) by 2026 at a Brent crude price of $70 per barrel, driven by its growth projects and cost savings. If oil averages $60 per barrel, Chevron still expects to generate extra FCF worth $9 billion through 2026. While higher FCF should be reflected in Chevron's share price, it could also mean bigger dividends for shareholders. Chevron prioritizes dividend growth and has increased its dividend for 38 consecutive years. Long story short, higher oil prices, rising cash flows, and growing dividends should drive Chevron shares higher and generate strong returns for investors. Before you buy stock in ConocoPhillips, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and ConocoPhillips wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $664,089!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $881,731!* Now, it's worth noting Stock Advisor's total average return is 994% — a market-crushing outperformance compared to 172% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 23, 2025 Matt DiLallo has positions in Chevron and ConocoPhillips. Neha Chamaria has no position in any of the stocks mentioned. Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Chevron. The Motley Fool has a disclosure policy. Oil Prices Are Spiking. 3 Top Oil Stocks to Buy to Cash in on Higher Crude Prices. was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
25-06-2025
- Business
- Yahoo
This Cheap Energy Stock is on Track for a Significant Increase in Cash Flows
Devon Energy Corporation (NYSE:DVN) is one of the 12 Best Natural Gas Stocks to Buy According to Analysts. A group of technicians in hazmat suits inspecting a natural gas storage tank. Devon Energy Corporation (NYSE:DVN) generated an impressive $1 billion in free cash flow in the first quarter of 2025, returning nearly half to shareholders through dividends and share buybacks. Moreover, the company boasts an impressive corporate breakeven of $45, positioning it well to generate value even in a low-price environment that we witnessed over the last couple of months. Devon Energy Corporation (NYSE:DVN) announced earlier this year that it is on track to deliver recently announced plans to boost its annual free cash flow by $1 billion by the end of 2026 by reducing drilling and completion costs and improving operating margins. At the company's current valuation multiples, capitalizing the after-tax impact of the targeted $1 billion of additional free cash flow could translate to an estimated $10 per share in value. With a current Forward P/E ratio of 8.88, Devon Energy Corporation (NYSE:DVN) is included among the 10 Cheap Energy Stocks to Buy Now. Devon Energy Corporation (NYSE:DVN) is a leading independent energy company engaged in finding and producing oil and natural gas, with operations focused onshore in the United States. While we acknowledge the potential of DVN as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: 10 Best Nuclear Energy Stocks to Buy Right Now and Disclosure: None.
