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4 Reasons to Add Devon Energy (DVN) Stock to Your Portfolio

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Estimates for Devon Energy Corporation (DVN - Free Report) have been revised upward over the past 90 days, reflecting analysts’ confidence in the stock. The Zacks Consensus Estimate for 2018 and 2019 earnings has moved 20.8% and 14.8% north to $1.63 & $3.10 per share, respectively.

Devon Energy is an independent energy company, primarily engaged in the exploration, development, and production of oil and natural gas. The company’s oil and gas operations are mainly concentrated in the onshore areas of North America, including the United States and Canada.

Let’s focus on the factors that make Devon Energy an attractive stock at the moment.

Price Appreciation

Over the past six months, the Zacks Rank #2 (Buy) stock has gained 7.2% compared with the industry’s growth of 3.4%.

 

 


Vision 2020

Devon continues to work on its Vision 2020 plan. To this end, the company is introducing an advanced technology to produce high volumes from oil wells. This is in line with its agenda to introduce cost-saving initiatives and generate peer-leading returns from invested capital for its shareholders.

U.S. Oil Production to Drive Devon

Devon Energy’s focus on its resource-rich Delaware and STACK assets, which is the backbone of its U.S.-based production, is likely to boost its performance. Devon maintains its 2018 oil production growth to be around 16% from the 2017 level. Given the ongoing upswing in oil prices, the company’s prospects are definitely going to get an added stimulus.

Move to Improve Shareholders’ Value

Devon’s board of directors authorized a $3-billion increase in Devon’s previously announced $1 billion share-repurchase program. Given this hike, the total buyback program is presently valued at $4 billion. The $3-billion rise in authorization extends through Dec 31, 2019.

At the end of July, Devon bought back 24 million shares or 5% of its outstanding shares for a total cost of $1 billion, which will surely generate a positive impact on earnings per share in the upcoming quarters.

Zacks Rank

Devon currently has a Zacks Rank #2 and is scheduled to report third-quarter earnings on Nov 6. The Zacks Consensus Estimate for the to-be-reported quarter has moved up by a penny in the past 30 days to 49 cents per share.

Upcoming Earnings Releases

Other top-ranked stocks from the same industry are Anadarko Petroleum Corporation , Apache Corporation (APA - Free Report) and CNX Resources Corporation (CNX - Free Report) , each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here

Anadarko Petroleum, Apache Corporation and CNX Resources are expected to report third-quarter earnings on Oct 30, Oct 31, and Oct 30, respectively. The Zacks Consensus Estimate for Anadarko Petroleum, Apache Corporation and CNX Resources is pegged at 89 cents, 45 cents and 14 cents, respectively.

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