Yahoo Finance Reasons to Add Devon Energy (DVN) to Your Portfolio Right Now
Devon Energy’s DVN capital investment, divestment of non-core assets and an increase in oil production will further boost its performance. Given its growth opportunities and strong dividend history, DVN makes for a solid investment option in the oil and gas industry.
Let’s focus on the factors that make this Zacks Rank #2 (Buy) company a strong investment pick at the moment.
Growth Projections & Surprise History
The Zacks Consensus Estimate for DVN’s 2023 earnings per share (EPS) has increased 5.2% to $5.85 in the past 60 days.
The Zacks Consensus Estimate for DVN’s 2024 EPS has increased 8.7% to $6.88 in the past 60 days.
DVN’s long-term (three to five-year) earnings growth rate is 51.35%. It delivered an average earnings surprise of 0.8% in the last four quarters.
Return on Equity
Return on equity (ROE) indicates how efficiently a company has been utilizing its funds to generate higher returns. Currently, Devon Energy’s ROE is 37.89%, higher than the industry’s average of 25.22%. This indicates that the company has been utilizing its funds more constructively than its peers in the oil and gas industry.
Dividend History
The company has been consistently increasing shareholders’ value by paying dividends. It has been paying dividends regularly for the past 31 years. In August 2023, its board approved a fixed and variable dividend rate of 49 cents per quarter, resulting in an annualized dividend of $1.96 per share. DVN’s current dividend yield is 1.6%, better than the Zacks S&P 500 Composite's average of 1.46%.
Systematic Investments
Devon Energy invested $2.54 billion in 2022 and aims to invest $3.6-$3.8 billion in 2023. The company is making strategic investments to upgrade and expand its assets. It has started developing its capital projects at a quick pace. During the third quarter of 2023, it plans to invest in the range of $855-$925 million.
DVN’s diversified portfolio and focus on high-margin assets hold significant long-term growth potential. Courtesy of ongoing investments in higher-margin U.S. oil-producing regions and solid base production, the company expects total production of 643,000-663,000 barrels of oil equivalent per day for 2023.
Price Performance
In the past month, DVN’s shares have rallied 1.9% against the sector’s average decline of 0.6%.
Image Source: Zacks Investment Research
Other Stocks to Consider
A few other top-ranked stocks from the same sector are Constellation Energy Corporation CEG, which currently sports a Zacks Rank #1 (Strong Buy), and Marathon Petroleum MPC and Phillips 66 PSX, each holding a Zacks Rank of 2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
CEG’s long-term earnings growth rate is 23.3%. The Zacks Consensus Estimate for 2023 EPS indicates a year-over-year improvement of 1,216.3%.
MPC’s long-term earnings growth rate is 6%. It delivered an average earnings surprise of 14.5% in the last four quarters.
PSX’s long-term earnings growth rate is 18.78%. It delivered an average earnings surprise of 12.2% in the last four quarters.
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Devon Energy Corporation (DVN) : Free Stock Analysis Report
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