Top Dividend Stocks: Hot Growth And Eye-Watering 8.6% Yield Highlight this Top Stock

Investors have scooped up energy stocks in 2022, lifting IBD’s Oil and Gas Exploration group into 34th position out of 197 industries. Devon Energy (DVN) is the group’s leader, offering a top dividend stock play.

X

Headquartered in Oklahoma City, this oil and natural gas producer exploits properties in Texas, Wyoming and North Dakota. 

Soaring energy prices have paved the way for record profits. Devon Energy reported second-quarter results in early August, posting a profit of $2.53 per share amid record $2.1 billion free-cash flow.

At the same time, the company increased 2022 guidance to $9.31 per share, a huge increase over 2021’s $3.53. It also raised 2023 guidance to an equally-impressive $9.81 per share. 

Dividend Stock: Devon Energy Raises Payout to 8.6%

High growth has led to a soaring dividend.

After strong quarterly results, Devon Energy increased its dividend 22% to $1.55 per share. This is the 7th consecutive quarter of dividend increases. As a comparison, the company paid a dividend of just 11 cents in the first quarter of last year. 

At current prices, the dividend provides an astonishing 8.6% annualized yield. It is scheduled for payment to shareholders of record on Sept. 13. 

Devon Energy boasts IBD’s top Composite Rating of 99. Shares are forming a cup base with a 79.50 buy point, identified by MarketSmith Research.

Managing Risk

Strong results have allowed Devon Energy to improve its balance sheet.

Last quarter, cash balances increased by $382 million to $3.5 billion, yielding a manageable debt of $6.5 billion. These strong financials should ensure the company continues high-yield payouts in the short term. 

However, this level of dividend growth is not expected to continue indefinitely and will depend on the highly volatile and uncertain energy markets.

Nevertheless, impressive growth and an eye-watering yield make Devon Energy a top dividend stock for investors willing to assume added risk. 

YOU MAY ALSO LIKE:

Zebra Technologies Beats Second-Quarter Goals But Offers Soft Outlook

Chipmaker Monolithic Power Systems Trounces Second-Quarter Targets, Guides Higher

Lattice Semiconductor Tops June-Quarter Goals, Raises Estimates

Learn How To Time The Market With IBD’s ETF Market Strategy

Find Today’s Best Growth Stocks To Watch With IBD 50