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Devon Energy Corp's Dividend Analysis

Insights into Devon Energy Corp's Upcoming Dividend and Financial Health

Devon Energy Corp (NYSE:DVN) recently announced a dividend of $0.35 per share, payable on 2024-06-28, with the ex-dividend date set for 2024-06-14. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Devon Energy Corp's dividend performance and assess its sustainability.

What Does Devon Energy Corp Do?

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Devon Energy is an oil and gas producer with acreage in several top US shale plays. While roughly two-thirds of its production comes from the Permian Basin, it also holds a meaningful presence in the Anadarko, Eagle Ford, and Bakken basins. At the end of 2023, Devon reported net proved reserves of 1.8 billion barrels of oil equivalent. Net production averaged roughly 658,000 barrels of oil equivalent per day in 2023 at a ratio of 73% oil and natural gas liquids and 27% natural gas.

Devon Energy Corp's Dividend Analysis
Devon Energy Corp's Dividend Analysis

A Glimpse at Devon Energy Corp's Dividend History

Devon Energy Corp has maintained a consistent dividend payment record since 1993. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.

Devon Energy Corp's Dividend Analysis
Devon Energy Corp's Dividend Analysis

Breaking Down Devon Energy Corp's Dividend Yield and Growth

As of today, Devon Energy Corp currently has a 12-month trailing dividend yield of 5.26% and a 12-month forward dividend yield of 4.47%. This suggests an expectation of decreased dividend payments over the next 12 months. Over the past three years, Devon Energy Corp's annual dividend growth rate was 89.80%. Extended to a five-year horizon, this rate decreased to 81.80% per year. And over the past decade, Devon Energy Corp's annual dividends per share growth rate stands at an impressive 15.00%.

Based on Devon Energy Corp's dividend yield and five-year growth rate, the 5-year yield on cost of Devon Energy Corp stock as of today is approximately 104.46%.

Devon Energy Corp's Dividend Analysis
Devon Energy Corp's Dividend Analysis

The Sustainability Question: Payout Ratio and Profitability

To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2024-03-31, Devon Energy Corp's dividend payout ratio is 0.30. Devon Energy Corp's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Devon Energy Corp's profitability 6 out of 10 as of 2024-03-31, suggesting fair profitability. The company has reported net profit in 6 years out of past 10 years.

Growth Metrics: The Future Outlook

To ensure the sustainability of dividends, a company must have robust growth metrics. Devon Energy Corp's growth rank of 6 out of 10 suggests that the company has a fair growth outlook. Revenue is the lifeblood of any company, and Devon Energy Corp's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Devon Energy Corp's revenue has increased by approximately 22.90% per year on average, a rate that outperforms approximately 59.28% of global competitors.

Conclusion: Devon Energy Corp's Dividend Prospects

Devon Energy Corp's consistent dividend payments, robust growth rates, and a reasonable payout ratio underscore its appeal to dividend-seeking investors. With a solid track record and a strategic position in significant shale plays, Devon Energy appears well-poised to sustain its dividend payments. For those looking to explore further, GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.

This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.

This article first appeared on GuruFocus.