13 Best Natural Gas and Oil Dividend Stocks To Buy

6. Devon Energy Corporation (NYSE:DVN)

Number of Hedge Fund Holders: 44

Devon Energy Corporation (NYSE:DVN) is an Oklahoma-based leading oil and natural gas exploration and production company. It currently pays a fixed and variable dividend of $0.35 per share and has a dividend yield of 5.85%, as recorded on June 10.

In the first quarter of 2024, Devon Energy Corporation (NYSE:DVN) reported a 6% decline in its revenue on a year-over-year basis at $3.6 billion. However, its average daily production during the quarter reached 664,000 barrels of oil equivalent, exceeding the projected figure by 4%. The company also reported a strong cash position, with an operating cash flow of $1.7 billion and a free cash flow of $844 million. This was the company’s 15th consecutive quarter of strong free cash flow. This growth is mainly attributed to the efficiency improvements in the Delaware-focused program. During the quarter, Devon Energy Corporation (NYSE:DVN) returned $430 million to shareholders through dividends and share repurchases, which makes DVN one of the best dividend stocks on our list.

Throughout the first quarter, Devon Energy Corporation (NYSE:DVN)’s financial stability improved as seen by growth in cash reserves by $274 million, reaching a total of $1.1 billion. By the end of the quarter, the company’s outstanding debt stood at $6.1 billion, resulting in a net debt-to-EBITDAX ratio of 0.7 times, indicating a healthy financial position.  Due to its strong operating momentum in Q1, the company has now raised its full-year guidance and also increased its cash flow projections. It expects a 2% growth in its production, within the range of 655,000 to 675,000 barrels of oil equivalent per day. The stock has a forward P/E of 8.83. Street analysts have an average price target of $60.8 for DVN, which represents a 28% upside potential. With these growth projections and recent earnings, analysts believe that DVN is an undervalued play.

At the end of the first quarter of 2024, 44 hedge funds tracked by Insider Monkey held stakes in Devon Energy Corporation (NYSE:DVN), down from 50 in the previous quarter. These stakes are collectively valued at nearly $1.1 billion.