1. Devon Energy Corporation (NYSE:DVN)
Dividend Yield as of September 28: 10.75%
Number of Hedge Fund Holders: 57
On August 1, Devon Energy Corporation (NYSE:DVN) announced earnings for the second quarter of fiscal 2022. The company reported earnings per share of $2.59 and outperformed consensus by $0.22. The company’s revenue for the quarter amounted to $5.63 billion, up 132.77% year over year, and beat estimates by $872.7 million. As of September 28, Devon Energy Corporation (NYSE:DVN) has gained 63.65% over the past twelve months.
Shortly after releasing its earnings, Devon Energy Corporation (NYSE:DVN) increased its quarterly cash dividend by 2% and declared a fixed-plus-variable dividend of $1.55 per share. The dividend is payable on September 30 to investors of record on September 12. Cramer is recommending investors to build up a stake in this “accidental high-yielder”. As of September 28, Devon Energy Corporation (NYSE:DVN) is trading at a PE multiple of 7x and is offering a forward dividend yield of 10.75%, which the company backs with free cash flows of $5.5 billion.
On September 21, Citi analyst Scott Gruber raised his price target on Devon Energy Corporation (NYSE:DVN) to $77 from $62 and reiterated a Buy rating on the shares. Over the past three months, the stock has received 7 Buy and 7 Hold ratings from Wall Street analysts and has an average price target of $83.79, which implies an upside of 43% from current levels.
At the close of Q2 2022, 57 hedge funds disclosed ownership of stakes in Devon Energy Corporation (NYSE:DVN). The total stakes of these hedge funds amounted to $1.48 billion. As of June 30, GQG Partners owns roughly 14.9 million shares of Devon Energy Corporation (NYSE:DVN) and is the most prominent investor in the company. The investment covers 2.01% of GQG Partners’ 13F portfolio. Cramer’s charitable trust has stakes in Devon Energy Corporation (NYSE:DVN).
Here is what GoodHaven Capital Management had to say about Devon Energy Corporation (NYSE:DVN) in its second-quarter 2022 investor letter:
“Our biggest dollar gainer within this period was Devon Energy Corporation (NYSE:DVN), a position which emanated from a takeover in early 2021 of our long time holding WPX Energy. We are sitting on a material (unrealized) gain from our cost and are now receiving material dividends thanks to Devon’s thoughtful fixed/variable dividend policy. Energy is now a hot sector for investors but we have had a material exposure for a long time. We remember a bit too well $40 oil, NEGATIVELY PRICED front-month oil contract, and what it’s like to own a company with leverage and negative free cash flow during such periods. Our desire to have our biggest portfolio exposures be high return, growing, reasonably predictable and moderately levered companies lead us to reduce our Devon exposure in the past. When the recent facts and circumstances for the industry changed and appeared supportive of healthy oil prices, we decided to maintain a sizable holding and more recently added to the position. At Devon’s Q1 dividend rate, which is mostly variable in nature, the shares now yield approximately 10% and our yield on our average cost is materially higher. In addition, we maintain additional energy exposure through our long-term (and successful) holding in Hess Midstream and less directly through TerraVest and Berkshire Hathaway’s energy investments.”
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