Oil and natural gas giant, Devon Energy Corporation (NYSE:DVN) is scheduled to release its Q3 results next week on November 1. For Q3, the Wall Street community expects DVN’s EPS to almost double year-over-year compared to the prior-year quarter’s EPS of $1.08 per share. The stock has gained 73% over the past year (not including dividends), while the S&P 500 (SPX) has lost 16%. Specifically, the stock has gained 35% over the past month, driven by OPEC+’s decision to cut oil production by 2 million barrels a day.
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Let’s take a closer look at the stock, which stands out for its outstanding stock outperformance in the last 12 months.
DVN’s Q3-2022 EPS to Grow Significantly
For Q3, the Street expects DVN to report adjusted earnings of $2.12 per share, almost double the prior-year period’s EPS of $1.08 per share.
The company has consistently beaten consensus estimates in all the preceding eight quarters and may keep up the record of its outperformance.
Concurrent with its Q2 results, the company raised its FY-2022 production forecast by 3% to a range of 600,000 – 610,000 barrels of oil equivalent (BOE) per day. The production outlook is well supported by its top-quality multi-basin assets as well as recent acquisitions in the Williston Basin.
The company has a fixed quarterly dividend of $0.18 per share. It is further topped with a variable dividend of up to 50% of excess free cash flow. Overall, the last quarterly dividend of $1.55 per share implies an annual dividend yield of 8.2% – if it could keep up that same profitability.
Is Devon Energy a Good Stock to Buy Now?
Turning to Wall Street, analysts are cautiously optimistic about Devon Energy stock and have a Moderate Buy consensus rating, which is based on seven Buys and seven Holds. Further, DVN stock boasts an average price target of $82.71, which implies 8.7% upside potential from current levels.
Notably, DVN stock has a ‘Perfect 10’ Smart Score on TipRanks. On top of that, it has a very positive signal from hedge fund managers, who added 664,500 shares during the last quarter.
Concluding Thoughts
Devon Energy has a robust balance sheet with a strong cash position backing its acquisitions, outstanding dividend growth, as well as consistent share buybacks.
Though the stock has surged in the past few months, it still has room for growth, especially for investors with a long-term view.
