10 Best Natural Gas Stocks To Invest In According to Hedge Funds

05. Ovintiv Inc. (NYSE:OVV)

Number of Hedge Fund Holders: 44

Ovintiv Inc. (NYSE:OVV) explores, develops, and markets natural gas, oil, and natural gas liquids, operating in major regions such as Texas, Oklahoma, and British Columbia. Ovintiv Inc. (NYSE:OVV) strategic assets, including the Montney and Anadarko regions, contribute significantly to its production capacity. Furthermore, hedge fund interest in Ovintiv Inc. (NYSE:OVV) has risen sharply, with 44 funds holding positions in the company by the end of Q2 2024, up from 34 in the previous quarter, signaling growing confidence in its potential.

Ovintiv Inc. (NYSE:OVV) recent Q2 2024 earnings report highlights its solid financial performance and effective capital management. The company posted net earnings of $340 million and cash flow of over $1 billion, surpassing market expectations. This outperformance was largely driven by strong production in both oil and natural gas segments, with production exceeding the top end of guidance. Ovintiv Inc. (NYSE:OVV) focus on operational efficiency allowed it to produce 594,000 barrels of oil equivalent (BOE) per day, while maintaining low capital costs, reinforcing its reputation for strong capital efficiency.

In terms of financial metrics, Ovintiv Inc. (NYSE:OVV) generated $403 million in free cash flow, and returned 60% of it to shareholders through dividends and share buybacks. The company also reduced its debt by over $100 million during the quarter, reflecting its commitment to optimizing its capital structure. This capital discipline is supported by Ovintiv’s substantial premium drilling inventory, which will enable it to sustain production levels for the next several years without increasing capital expenditure.

Additionally, Ovintiv Inc. (NYSE:OVV) operational success in the Montney region, where well costs are among the lowest in its portfolio, demonstrates the company’s ability to maintain high margins, even amid fluctuating natural gas prices. As natural gas prices stabilize, Ovintiv Inc. (NYSE:OVV) remains well-positioned to generate robust returns for shareholders, making it an attractive investment for hedge funds and long-term investors alike.