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Zacks Value Trader Highlights: Devon Energy, Pioneer Natural Resources, Coterra Energy, Diamondback Energy, and EOG Resources
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For Immediate Release
Chicago, IL – June 10, 2022 – Zacks Value Trader is a podcast hosted weekly by Zacks Stock Strategist Tracey Ryniec. Every week, Tracey will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life. To listen to the podcast, click here: https://www.zacks.com/stock/news/1937044/top-value-stocks-with-amazing-dividend-yields
Top Value Stocks with Amazing Dividend Yields
Welcome to Episode #284 of the Value Investor Podcast.
(1:00) - Breaking Down The Energy Sector: Strong Value Stocks That Pay Dividends
Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio, shares some of her top value investing tips and stock picks.
Value stocks are back in vogue in 2022 but so are dividend stocks. What if you could buy a cheap stock that was yielding above 5% and also had rising earnings estimates?
Too good to be true?
Not if you know where to look.
Energy Companies to See Record Earnings and Free Cash Flows Again in Q2
Energy companies were already paying juicy dividends earlier this year. Many are paying a base dividend, special or variable dividends, and they're buying back shares because they consider them to be cheap.
Combining all three shareholder friendly actions can result in yields above 8%.
With crude and natural gas at new decade highs heading into the summer, free cash flows should remain elevated in the near term.
Beware: You Can't Screen for High Dividend Yields Right Now
Because so many companies are paying special dividends, the yields on many energy companies are, frankly, messed up on most financial sites. They are under-reporting the true yield.
You have to actually dig into the dividend announcements by the companies.
That's a lot of work, so Tracey has done it for you so you don't have to.
Devon Energy drills in the Delaware Basin. With a market cap of $51 billion, it posted record free cash flow in the first quarter.
Devon Energy is paying a fixed plus variable dividend which was $1.27 in the first quarter, payable to shareholders of record as of June 13 on June 30.
YahooFinance says Devon Energy is yielding 6.6% but it's also doing a huge share repurchase program which it raised by 25% to $2 billion in the first quarter.
Devon Energy trades at just 8.9x.
Should Devon be on your wish list even as it is making new 52-week highs?
Pioneer Natural Resources drills in the Permian Basin and has one of the best balance sheets in the industry. In the first quarter it returned 88% of free cash flow to shareholders though a base dividend, a variable dividend and a share repurchase program.
The quarterly and variable dividend in Q1 was $7.38, which at that time was an annualized yield of 13%, the highest in the S&P 500.
Pioneer Natural Resources shares are at new highs, up 56% year-to-date. But they're still cheap with a forward P/E of 8.4.
Should you be diving into Pioneer for that huge dividend?
Coterra Energy was formed in 2021when Cabot Oil & Gas and Cimarex Energy merged. It drills in the Delaware Basin, in the Anadarko Basin in Oklahoma and the Marcellus shale in the Appalachian Basin where it drills 100% natural gas.
In the first quarter, Coterra Energy paid out 69% of its free cash flow back to shareholders.
That included a $0.15 base dividend, a $0.45 variable dividend and starting to execute on its $1.25 billion share repurchase plan.
Shares are up 87% year-to-date but still trade with a forward P/E of just 8.7.
Is Coterra Energy the hidden gem of the group, especially with natural gas prices soaring?
Diamondback Energy drills in the Permian and announced on May 16, 2022 that it was acquiring Rattler Midstream.
In the first quarter, Diamondback Energy raised its base dividend by 17% to $0.70 per quarter, or $2.80 annualized. That's a yield of 1.8%. But that's not all.
In the quarter, it announced a variable dividend of $2.35 which combined with the base was yielding 9.7% as of May 2.
It's also repurchasing shares.
Should investors be buying Diamondback exclusively for its big dividend?
EOG Resources is one of the big drillers with a market cap of $85.6 billion. It has pledged to return a minimum of 60% of its free cash flow to shareholders.
In the first quarter it paid a regular dividend of $0.75 and a special dividend of $1.80. The regular dividend, which is $3.00 annualized, was up 86% from the 2021 regular dividend of $1.61.
The special dividend of $1.80 is payable on June 30 to shareholders of record as of June 15, 2022.
With WTI remaining over $100 for most of the second quarter, should income investors be jumping into EOG Resources?
What Else do you Need to Know About Finding Cheap Energy Stocks with Big Yields?
Tune into this week's podcast to find out.
[In full disclosure, Tracey owns shares of PXD in her personal portfolio.]
Why Haven't You Looked at Zacks' Top Stocks?
Our 5 best-performing strategies have blown away the S&P's impressive +28.8% gain in 2021. Amazingly, they soared +40.3%, +48.2%, +67.6%, +94.4%, and +95.3%. Today you can access their live picks without cost or obligation.
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Click here for your free subscription to Profit from the Pros.
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.
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Zacks Value Trader Highlights: Devon Energy, Pioneer Natural Resources, Coterra Energy, Diamondback Energy, and EOG Resources
For Immediate Release
Chicago, IL – June 10, 2022 – Zacks Value Trader is a podcast hosted weekly by Zacks Stock Strategist Tracey Ryniec. Every week, Tracey will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life. To listen to the podcast, click here: https://www.zacks.com/stock/news/1937044/top-value-stocks-with-amazing-dividend-yields
Top Value Stocks with Amazing Dividend Yields
Welcome to Episode #284 of the Value Investor Podcast.
Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio, shares some of her top value investing tips and stock picks.
Value stocks are back in vogue in 2022 but so are dividend stocks. What if you could buy a cheap stock that was yielding above 5% and also had rising earnings estimates?
Too good to be true?
Not if you know where to look.
Energy Companies to See Record Earnings and Free Cash Flows Again in Q2
Energy companies were already paying juicy dividends earlier this year. Many are paying a base dividend, special or variable dividends, and they're buying back shares because they consider them to be cheap.
Combining all three shareholder friendly actions can result in yields above 8%.
With crude and natural gas at new decade highs heading into the summer, free cash flows should remain elevated in the near term.
Beware: You Can't Screen for High Dividend Yields Right Now
Because so many companies are paying special dividends, the yields on many energy companies are, frankly, messed up on most financial sites. They are under-reporting the true yield.
You have to actually dig into the dividend announcements by the companies.
That's a lot of work, so Tracey has done it for you so you don't have to.
5 High Yield (Over 5%) Cheap Energy Stocks
1. Devon Energy (DVN - Free Report)
Devon Energy drills in the Delaware Basin. With a market cap of $51 billion, it posted record free cash flow in the first quarter.
Devon Energy is paying a fixed plus variable dividend which was $1.27 in the first quarter, payable to shareholders of record as of June 13 on June 30.
YahooFinance says Devon Energy is yielding 6.6% but it's also doing a huge share repurchase program which it raised by 25% to $2 billion in the first quarter.
Devon Energy trades at just 8.9x.
Should Devon be on your wish list even as it is making new 52-week highs?
2. Pioneer Natural Resources (PXD - Free Report)
Pioneer Natural Resources drills in the Permian Basin and has one of the best balance sheets in the industry. In the first quarter it returned 88% of free cash flow to shareholders though a base dividend, a variable dividend and a share repurchase program.
The quarterly and variable dividend in Q1 was $7.38, which at that time was an annualized yield of 13%, the highest in the S&P 500.
Pioneer Natural Resources shares are at new highs, up 56% year-to-date. But they're still cheap with a forward P/E of 8.4.
Should you be diving into Pioneer for that huge dividend?
3. Coterra Energy (CTRA - Free Report)
Coterra Energy was formed in 2021when Cabot Oil & Gas and Cimarex Energy merged. It drills in the Delaware Basin, in the Anadarko Basin in Oklahoma and the Marcellus shale in the Appalachian Basin where it drills 100% natural gas.
In the first quarter, Coterra Energy paid out 69% of its free cash flow back to shareholders.
That included a $0.15 base dividend, a $0.45 variable dividend and starting to execute on its $1.25 billion share repurchase plan.
Shares are up 87% year-to-date but still trade with a forward P/E of just 8.7.
Is Coterra Energy the hidden gem of the group, especially with natural gas prices soaring?
4. Diamondback Energy (FANG - Free Report)
Diamondback Energy drills in the Permian and announced on May 16, 2022 that it was acquiring Rattler Midstream.
In the first quarter, Diamondback Energy raised its base dividend by 17% to $0.70 per quarter, or $2.80 annualized. That's a yield of 1.8%. But that's not all.
In the quarter, it announced a variable dividend of $2.35 which combined with the base was yielding 9.7% as of May 2.
It's also repurchasing shares.
Should investors be buying Diamondback exclusively for its big dividend?
5. EOG Resources (EOG - Free Report)
EOG Resources is one of the big drillers with a market cap of $85.6 billion. It has pledged to return a minimum of 60% of its free cash flow to shareholders.
In the first quarter it paid a regular dividend of $0.75 and a special dividend of $1.80. The regular dividend, which is $3.00 annualized, was up 86% from the 2021 regular dividend of $1.61.
The special dividend of $1.80 is payable on June 30 to shareholders of record as of June 15, 2022.
With WTI remaining over $100 for most of the second quarter, should income investors be jumping into EOG Resources?
What Else do you Need to Know About Finding Cheap Energy Stocks with Big Yields?
Tune into this week's podcast to find out.
[In full disclosure, Tracey owns shares of PXD in her personal portfolio.]
Why Haven't You Looked at Zacks' Top Stocks?
Our 5 best-performing strategies have blown away the S&P's impressive +28.8% gain in 2021. Amazingly, they soared +40.3%, +48.2%, +67.6%, +94.4%, and +95.3%. Today you can access their live picks without cost or obligation.
See Stocks Free >>
Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor of the Insider Trader and Value Investor services. You can follow her on twitter at @TraceyRyniec and she also hosts the Zacks Market Edge Podcast on iTunes.
About Zacks
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Click here for your free subscription to Profit from the Pros.
Follow us on Twitter: https://twitter.com/zacksresearch
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Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
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https://www.zacks.com/performance
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.