Say What? May 13, 2021

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Three Energy Stocks

Disclaimer: this is not an investment site.  Do not make any investment, financial, job, career, travel, or relationship decisions based on what you read here or think you may have read here.

Link to Alex Kimani.

The few articles I recall posted by Alex Kimani suggest he and I are on the same page of music. 

The three publicly traded companies:

• Apache Corp: smart hedging strategy;
• Cheniere Energy: pure-play LNG producer;
• Devon: strong earnings + variable dividends

Alex says BofA recently noted three companies with the potential to grow their free cash flow through consolidations or other cost reduction measures:

• Devon
• Pioneer Natural Resources
• EOG Resources

Devon:

• capital (CAPEX) discipline
• no intention of allocating capital to growth projects until demand side fundamentals recover and it becomes evident that OPEC+ spare oil capacity is effectively absorbed by the world markets
• has adopted a variable dividend structure; something Wall Street seems to appreciate
  

Final words re: Devon:

Devon paid an $0.11/share regular dividend and a $0.24/share variable dividend during the quarter, implying an annualized 5.5% yield. Further, the company has forecast a dividend yield of more than 7% for 2021 if current trends hold, illustrating its commitment to return more capital to shareholders in the form of dividends whenever cash flows permit.

Some Wall Street analysts have pointed to the potential for DVN to sport a dividend yield of as high as 8% by year-end.

Another key attraction: Despite the rally, DVN stock remains relatively cheap.

Disclaimer: this is not an investment site.  Do not make any investment, financial, job, career, travel, or relationship decisions based on what you read here or think you may have read here.