On Oct 8, 2013, Zacks Investment Research upgraded
Devon Energy Corp.
) to a Zacks Rank #1 (Strong Buy).
DEVON ENERGY (DVN): Free Stock Analysis
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Why the Upgrade?
Devon Energy reported positive earnings surprise in each of the
past 4 quarters with an earnings beat of 19.7%. The company's
long-term expected earnings growth is poised at a promising 6.7%.
Higher production volume and an increase in operating profit at
the company's marketing and midstream segment are expected to act
as positive catalyst for earnings growth.
We appreciate Devon Energy's strong liquidity position as well as
stable operational efficiencies. The company's cash balance
totaled $3.36 billion as of Jun 30, 2013 and cash flow from
operating activities in second-quarter 2013 was $1.39 billion.
A strong financial position enables Devon Energy to continue with
its steady growth strategy. During second-quarter 2013, the
company invested $1.2 billion for the exploration and development
activities. The company allocates its resources to the projects
that are vital for its future growth. Devon Energy is currently
focusing on its oil and liquids-rich opportunities, and majority
of its drilling programs are centered on the oil-focused assets
in the Permian Basin.
Devon Energy's subsidiary, Devon Midstream Partners, L.P.
recently filed a registration statement with the Securities and
Exchange Commission to form a publicly traded midstream master
limited partnership. The new partnership will primarily run the
natural gas gathering and processing business. We view the
company's effort to shift towards pipeline venture as a positive
move, mainly due to higher demand for transportation services
from the petroleum exploration and production companies in Okla.,
Texas and Wyo.
Devon Energy has a steady dividend payment record. During the
first six months of 2013, the company paid common stock dividends
of $170 million. We believe the company's practice of returning
wealth to shareholders through dividend payment will be
beneficial for the stock as it attracts investor attention.
Other Stocks to Consider
Besides Devon Energy, other stocks in the coal industry that are
presently performing well include
Matador Resources Company
Linn Co, LLC
Resolute Energy Corporation
), each with Zacks Rank #1 (Strong Buy).