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P and Josepar 15 1 hirun Devon Energy Corporation (NYSE:DVN) is a U.S. hydrocarbon company with a valuation of roughly $25 billion. The company has a dividend yield of more than 5% and is committed to generating strong shareholder returns, which it's built a history of doing so recently. As will see throughout this article, Devon Energy can cominus generating strong shareholder returns. Devon Energy Business Model The company's business model centers around growing its production and increasing overall shar ...

The energy sector has experienced a significant pullback in recent months, which could present compelling buying opportunities for value investors. While the sector remains up 2.59% year-to-date, it's far off the doubledigit gains it saw earlier in the year. The sector has now pulled back nearly 13% from its 52-week highs in April. One major factor weighing on the sector is the price of oil, which has dropped to 52-week lows, with Crude Oil Futures trading near $68. This decline has put pressure on energy s ...

September often carries a reputation for market volatility and potential downturns, usually called the "September Effect." This perception is rooted in historical observations, but savvy investors should avoid letting perceived trends dictate their investment decisions. Focusing on solid fundamentals and identifying companies with robust growth prospects can yield positive returns regardless of the month. Get Devon Energy alerts: Unraveling the Mystery of the "September Effect" The "September Effect" refers ...

These high-yield oil and gas stocks are great options for investors looking for exposure to the energy sector. If you want high-yield stocks, the oil and gas sector offers plenty of great options that are worth considering as part of a diversified portfolio. The challenge, of course, if finding the right ones. If you are looking for some high-yield stocks to add to your portfolio in September, you might want to consider Devon Energy (DVN -0.49%), Diamondback Energy (FANG -0.85%), and/or Vitesse Energy (VTS ...

Core Viewpoint - Devon Energy is positioned for potential significant increases in its dividend, particularly in 2025, driven by high cash flow generation and strategic acquisitions [2][12]. Group 1: Dividend and Financial Performance - The current trailing-dividend yield of Devon Energy is 4.5%, with a historical dividend of $5.06 in 2022, which would have represented an 11.4% yield at the current stock price of $44.65 [5]. - Devon's free cash flow (FCF) yield is projected to be 8.6% at $70 per barrel of oil, 10.5% at $80, and 12.5% at $90, indicating strong potential for capital returns [9]. - The company's capital-allocation policy dictates that 70% of its free cash flow should be returned to shareholders through dividends and share buybacks [10]. Group 2: Production and Acquisitions - Devon Energy's acquisition of Grayson Mill Energy's Williston basin business for $5 billion is expected to enhance production by 100,000 barrels of oil equivalent per day in 2025, representing a nearly 15% increase [4][10]. - The estimated full-year production volume for Devon in 2024 is projected to be between 677,000 and 688,000 barrels of oil equivalent per day [10]. Group 3: Market Conditions and Future Outlook - The volatility of oil and gas prices remains a significant factor affecting Devon's earnings and cash flow, with recent declines in gas prices impacting its financial performance [6]. - Assuming stable energy prices, the increased production is expected to lead to significantly improved free cash flow, potentially resulting in a dividend yield of 6% based on a $70 oil price in 2024 [12]. - A 15% increase in free cash flow in 2025 could elevate the dividend yield to 6.9% or higher if oil prices exceed $70 [13].

Devon Energy, UPS, and nVent Electric all have their fair share of challenges, but their valuations are simply too cheap to ignore. The S&P 500 and Dow Jones Industrial Average are less than 1% off their all-time highs, while the Nasdaq Composite is off by less than 5% from its peak. And yet, there are still plenty of stocks that are trading far below their peak prices, and many that have lost ground so far this year. Among those stocks are oil and gas exploration and production company Devon Energy (DVN -0 ...

Core Viewpoint - Devon Energy is currently undervalued despite its strong free cash flow generation capabilities, making it an attractive investment opportunity in the oil sector [2][10]. Financial Performance - Devon Energy generated $587 million in free cash flow during the second quarter, an increase of 80% year-over-year, driven by rising production and improved commodity pricing [4]. - The company has a breakeven level of around $40 per barrel in the Delaware Basin, allowing it to produce significant cash flow at current oil prices [3]. Valuation Metrics - Devon Energy trades at a free cash flow yield of approximately 10% based on a forecast of $75 oil in 2024, significantly higher than the Nasdaq's 3% and the S&P 500's 4% yields [5]. - The company's dividend yield is around 4%, compared to 1.3% for the S&P 500 and 0.8% for the Nasdaq, indicating a cheaper valuation [5]. Acquisition Strategy - Devon Energy is in the process of acquiring Grayson Mill Energy for $5 billion, which is expected to be immediately accretive to its earnings and cash flow [6]. - The acquisition is projected to increase cash flow per share by about 10% in the first year and improve free cash flow by 15% [7]. Capital Allocation - The company has shifted its capital allocation strategy to prioritize share repurchases over variable dividends, with nearly half of its capital return in the second quarter being share buybacks [8]. - Devon Energy expanded its share repurchase program by 67% to $5 billion through mid-2026, adding to the $2.7 billion repurchased since late 2021 [9].

Core Viewpoint - Devon Energy Corporation (DVN) has experienced an 8.1% decline in share price over the past year, contrasting with a 2.5% decline in its industry and a 25.6% growth in the Zacks S&P 500 composite [1] Performance Analysis - Over the last six months, DVN's stock has gained 2.9%, indicating a gradual recovery, while EQT Corporation (EQT) saw an 11.4% decline in share price during the same period [2] Asset Portfolio - Devon Energy has a multi-basin portfolio with high-margin oil and gas assets that possess significant long-term growth potential [3] - The company’s assets can sustain production levels for over 10 years, providing reliable and affordable energy [4] - Devon maintains a diverse commodity mix, balancing exposure to oil, natural gas, and natural gas liquids [4] Cost Management - A low-cost operating structure enhances the company's margins, with efforts to reduce costs by divesting higher-cost assets and bringing lower-cost production assets online [5] Earnings Estimates - The Zacks Consensus Estimate for Devon Energy's earnings per share for 2024 and 2025 has increased by 1.9% and 6.12%, respectively, over the past 60 days, reflecting analysts' growing confidence [6] Capital Return Program - Devon Energy has generated free cash flow for 16 consecutive quarters, utilizing this cash flow to reduce debt, pay dividends, and repurchase shares [8] - As of June 30, 2024, the company repurchased shares worth $2.7 billion and increased its share-repurchase authorization by 67% to $5 billion through mid-2026 [9] Financial Metrics - Devon Energy's trailing 12-month return on assets (ROA) is 14.46%, surpassing the industry average of 9.16%, indicating efficient asset utilization [10] - The current trailing 12-month Enterprise Value/Earnings before Interest Tax Depreciation and Amortization (EV/EBITDA TTM) for Devon is 4.41, compared to the industry average of 7.4, suggesting the shares are trading at a discount [12] Summary - Devon Energy possesses a strong portfolio of high-quality assets that generate free cash flow, strengthen the balance sheet, and enhance shareholder value [14] - The company’s balanced exposure to oil, natural gas, and NGL production adds to its competitive advantage [14] - This may represent a favorable entry point for investors, as the stock is trading at a discount with rising earnings estimates and strong ROA [15]

As the market appears to be entering a new regime with potential rate cuts on the horizon, investors might find it advantageous to look into undervalued stocks with bullish ratings from analysts. With capital flows and liquidity expected to rise, these stocks could benefit and offer promising opportunities. Here's a closer look at three such stocks: Get General Motors alerts: Attractive Valuation: Devon Energy Boasts a P/E Ratio of 8.53 Devon Energy MarketRank™ Stock Analysis Overall MarketRank™ 4.98 out of ...