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Devon Energy (DVN) Rewards Shareholders with Dividend Hike


Devon Energy Corporation’s DVN board of directors has approved a 33% hike in the quarterly dividend payment to 8 cents per share. The new dividend is payable on Jun 29, 2018 to shareholders of record as of Jun 15, 2018.

The company also made an announcement of repurchasing of $1.0 billion shares of common stock over the next year. This program covers nearly 6% of the company’s outstanding common stock at the current share price.

Reason for the Hike

Unfavorable commodity prices compelled Devon Energy to reduce dividend from 24 cents to 6 cents in second-quarter 2016. However, commodity prices continue to recover from historical low. The company’s “2020 Vision” will help it strength production, lower operating costs and generate strong cash flows. Such developments are likely to enable the company develop its high margin assets and boost shareholder value.

Fourth-quarter results reflect 41.8% increase in total revenues, courtesy of higher commodity price realizations and increased higher-margin liquids production. Devon Energy’s 2017 operating cash flow improved 94% year over year to $2.9 billion.

Price Performance

In the last six months, Devon Energy’s shares have lost 2.7% against the industry’s rally of 14.1%.

Zacks Rank & Key Picks

Devon Energy carries a Zacks Rank #4 (Sell).

A few better-ranked stocks in the same industry are Concho Resources Inc. (CXO), PDC Energy, Inc. (PDCE), Energen Corporation (EGN). All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Concho Resources CXO posted an average positive earnings surprise of 48.89% in the past four quarters. The Zacks Consensus Estimate moved up 18.92% in the last 30 days.

PDC Energy PDCE posted an average positive earnings surprise of 553.57% in the past four quarters. The Zacks Consensus Estimate moved up 52.08% in the last 30 days.

Energen EGN posted an average positive earnings surprise of 19.67% in the past four quarters. The Zacks Consensus Estimate moved up 20.30% in the last 30 days.

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