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Analyst Blog

On April 2, 2014, the shares of Devon Energy Corporation (DVN - Analyst Report) hit a 52-week high of $68.24 in intraday trading to finally close at $67.89. This comes to a gain of 27.9% over the past one-year period. The company has been performing well, registering positive earnings surprises in the last four quarters, with an average beat of 13.98%.

The steady performance from this energy company, quarter after quarter, is a result of meticulous planning and sound managerial strategies. The deep and diversified portfolio of Devon Energy added to its capital discipline and consistent focus on projects that are vital for future growth is a definite combination for success.

In fourth quarter 2013, Devon’s earnings were able to surpass the Zacks Consensus Estimate backed by strong production and higher realized prices of the product sold.

Moreover, Devon has acquired assets worth $6 billion in the Eagle Ford shale from GeoSouthern Energy. This will fetch long-term benefits for the company given the rising worldwide demand for oil and natural gas and the country’s drive to be energy independent in the future

Devon Energy has been working on a strategy to monetize its international assets and use the proceeds to concentrate more on core assets. As a part of that strategy, the company recently sold its conventional Canadian assets to Canadian Natural Resources Ltd. (CNQ - Analyst Report). Devon will use the proceeds of US$2.7 billion (after adjusting for currency exchange and taxes associated with the sale and repatriation of the funds to the U.S.) to repay the debt incurred for the Eagle ford acquisition.

Recently, the company increased its quarterly dividend rate by 9% to 24 cents, raising it for the ninth time since 2004. Incremental dividend payments reflect Devon’s financial strength and shareholder-friendly policies.

Devon Energy currently carries a Zacks Rank #3 (Hold).  Other companies in the industry worth considering are Range Resources Corp. (RRC - Analyst Report) and World Point Terminals, LP (WPT - Snapshot Report), both with a Zacks Rank #1 (Strong Buy).

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