Forget Devon Energy: Buy This Magnificent High-Yield Stock Instead

Devon Energy (DVN) - Devon Energy is an upstream energy company with a current dividend yield of 4 4% which is higher than the market average of 1 2% and the energy sector average of 3 1% [3] - The company's oil production reached an all-time high in Q2 2024 and it has increased its full-year production guidance for the second consecutive quarter [2] - Devon Energy's dividend payments are highly variable as they are tied to the company's financial performance which is heavily influenced by energy prices [3] - The company has expanded its portfolio through acquisitions and has at least 10 years' worth of drilling opportunities in its portfolio [2] - Devon Energy's dividend can serve as a hedge against rising real-world energy costs such as gasoline and heating [8] Enterprise Products Partners (EPD) - Enterprise Products Partners is a midstream energy company with a distribution yield of 7 4% and has increased its distribution for 26 consecutive years [4] - The company's cash flows are highly consistent as it charges fees for the use of its infrastructure assets which are less affected by energy price fluctuations [6] - Enterprise Products Partners covers its distribution by 1 7 times with distributable cash flow making it a reliable choice for high-yield investors [4] - The company's business model is designed around consistency and it can afford to pay large distributions through the entire energy cycle [6] - Growth for Enterprise Products Partners comes from rate increases new assets and acquisitions though the growth opportunity is modest [7] Comparison - Devon Energy's dividend is more volatile due to its dependence on energy prices while Enterprise Products Partners offers a more stable and reliable income stream [3][6] - Devon Energy is an upstream producer directly impacted by energy prices whereas Enterprise Products Partners is a midstream player with a fee-based revenue model [5][6] - For investors seeking a hedge against rising energy costs Devon Energy may be suitable but for those prioritizing consistent income Enterprise Products Partners is the better choice [8]