Devon Energy stock shows big potential for future growth
Looking for a good energy company for your portfolio? Check out Devon Energy (NYSE: DVN). It’s a major oil and gas producer with a balanced production mix and a vast and diversified portfolio of high-quality assets all over North America. And with a couple of recent joint ventures under its belt, the company’s prospects for future growth look brighter than ever.
Devon has been known as a predominantly natural-gas-focused company. But recognizing the poor economics of the dry gas business given low gas prices, Devon has been shifting its focus to higher-margin oil and natural gas liquids. For the year, Devon has allocated 100 percent of its $6 billion-plus capital budget toward oil and liquids-rich projects. It also has a solid track record of growing oil production in recent years. Meanwhile, Devon maintains the flexibility to shift back to drilling for dry gas should prices rebound sufficiently.
The company has one of the strongest balance sheets and liquidity positions among its peer group, having ended the second quarter with more than $7 billion in cash and short-term investments.
Since 2003, Devon has reduced its net debt by more than $3 billion, while still raising its dividend by an annual average of 26 percent since 2004. Its dividend recently yielded 1.5 percent. (The Motley Fool owns shares of Devon Energy.)
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