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

02. Devon Energy Corporation (NYSE:DVN)

Number of Hedge Fund Holders: 52

Devon Energy Corporation (NYSE:DVN) stands out as a top natural gas stock due to its robust presence in key U.S. shale basins, such as the Delaware, Eagle Ford, and Anadarko, which are rich in natural gas reserves. The company’s strategic focus on natural gas and natural gas liquids production makes it an attractive investment in the energy sector. As of the second quarter of 2024, 52 hedge funds hold positions in Devon Energy Corporation (NYSE:DVN), up from 44 in the previous quarter, reflecting increasing confidence in the company’s fundamentals.

Devon Energy Corporation (NYSE:DVN) Q2 2024 earnings highlight solid operational and financial performance. The company exceeded production guidance, with a record 335,000 barrels of oil per day, largely driven by its operations in the Delaware Basin. This basin continues to be a growth engine for Devon, contributing to the 9% year-over-year increase in per-share volumes. The company’s ability to manage costs effectively, along with impressive well productivity, has further strengthened its position.

Financially, Devon Energy Corporation (NYSE:DVN) posted core earnings of $885 million, or $1.41 per share, marking significant year-over-year growth. Operating cash flow reached $1.5 billion, a 9% increase from the previous year, and free cash flow came in at $587 million. This strong financial performance has allowed Devon to maintain a disciplined capital allocation strategy, returning 70% of its excess free cash flow to shareholders through dividends and stock repurchases. The company’s low net debt-to-EBITDA ratio of 0.6x underscores its solid balance sheet.

The recent acquisition of Grayson Mill assets in the Williston Basin has further bolstered Devon Energy Corporation (NYSE:DVN) portfolio, adding 300,000 net acres and significant oil and gas production capacity. This acquisition is expected to enhance earnings and free cash flow in the coming years, providing sustainable growth opportunities. With its strong operational performance, disciplined financial management, and strategic acquisitions, Devon Energy Corporation (NYSE:DVN) is well-positioned for long-term growth, making it a compelling choice for natural gas investors.