5 Best Cyclical Stocks for Inflation

2. Pioneer Natural Resources Company (NYSE:PXD)

Number of Hedge Fund Holders: 54

Pioneer Natural Resources Company (NYSE:PXD) is a Texas-based hydrocarbon exploration company. The company operates in Cline Shale in the Permian Basin. On June 14, Barclays analyst Jeanine Wai maintained an Overweight rating on Pioneer Natural Resources Company (NYSE:PXD)’s shares after raising the price target to $339 from $302.

Pioneer Natural Resources Company (NYSE:PXD)’s share repurchase program was worth $250 million in the first quarter of 2022. The annualized sum shows a 1.8% return through buybacks. Furthermore, a special quarterly dividend of $7.38 was declared on May 4, with $0.78 as a base dividend and $6.60 as a variable. The dividend was paid out on June 14, 2022. The combined dividend amount of $1.9 billion shows that the company returned 83% of its free cash flow to its shareholders. In conclusion, the share buyback program and dividends drive the total shareholder yield close to 15%, one of the highest in the S&P 500 index.

Among the hedge funds tracked by Insider Monkey, 54 hedge funds were bullish on Pioneer Natural Resources Company (NYSE:PXD), compared to 43 in the previous quarter. Abrams Bison Investments was the most significant stakeholder in Q1 2022, with a total stake value of $149.5 million. The firm had also increased its holdings in the company by 12.67% in Q1 2022.

Here is what ClearBridge Investments had to say about Pioneer Natural Resources Company (NYSE:PXD) in its first-quarter 2022 investor letter:

“Our underweight to the energy sector weighed on performance, as energy prices skyrocketed from inflationary pressures and the threat of reduced supply. We have a limited footprint within the sector but continue to look for companies that will generate strong, long-term returns such as Pioneer Natural Resources. Pioneer is an oil and gas exploration and production company that offers a combination of a strong asset base, quality balance sheet and compelling free cash flow yield at current commodity prices. We believe Pioneer has strong underlying drivers that will generate attractive risk-adjusted returns beyond shorter-term fluctuations in energy prices.”