7 Best Debt Free Dividend Stocks To Buy

1. Epsilon Energy Ltd. (NASDAQ:EPSN)

Dividend Yield as of August 16: 4.65%

Market Cap as of August 16: $118.16 million 

Enterprise Value as of August 16: $110.1 million 

Epsilon Energy Ltd. (NASDAQ:EPSN) is a Texas-based independent oil and natural gas company that specializes in the acquisition, development, gathering, and production of natural gas and oil reserves. The company’s recent quarterly earnings were strong. Its Permian assets have continued to perform strongly, showing significant quarter-over-quarter increases in both oil volumes and revenue. This performance is attributed to a full quarter’s contribution from the acquisition made in the first quarter and one month of production from the sixth well in the Pradera Fuego project. Additional sequential oil growth is anticipated in the third quarter, as the sixth well will have a full quarter of contribution and the seventh well is now on flowback, producing over 700 barrels of oil per day while still being cleaned up.

Epsilon Energy Ltd. (NASDAQ:EPSN) is well-positioned for ongoing growth in the Permian Basin and anticipates significant potential for its Marcellus assets in the coming year, given the improving natural gas environment. With a recently expanded and undrawn credit facility, along with strong cash flows and available cash, the company is in a strong position to maintain its dividend payments and explore promising new projects.

For the first six months of 2024, Epsilon Energy Ltd. (NASDAQ:EPSN) generated over $9 million in operating cash flows. The company started paying dividends in 2022 and has paid regular dividends since then. In the second quarter of 2024, it returned $1.4 million to shareholders through dividends. Currently, it offers a quarterly dividend of $0.0625 per share for a dividend yield of 4.65%, as of August 16.

According to Insider Monkey’s database of Q2 2024, 7 hedge funds held stakes in Epsilon Energy Ltd. (NASDAQ:EPSN), up from 6 in the previous quarter. These stakes are worth over $31.4 million in total. With over 3.6 million shares, Solas Capital Management was the company’s leading stakeholder in Q2.

While we acknowledge the potential of EPSN as an investment, our conviction lies in the belief that some deeply undervalued dividend stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a deeply undervalued dividend stock that is more promising than EPSN but that trades at less than 7 times its earnings and yields nearly 10%, check out our report about the dirt cheap dividend stock.

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Disclosure: None. This article is originally published at Insider Monkey.