Devon Energy Gains From Multi-basin Portfolio, Strategic Acquisition

Devon Energy DVN has been gaining from a top-notch multi-basin portfolio, debt and cost management, generation of free cash flow and acquisitions that boost expansion and production.Long-term (three to five years) earnings growth of the company is projected at 3.28%.DVN’s TailwindsDevon Energy operates a multi-basin portfolio and prioritizes high-margin assets with substantial long-term growth potential. The company also benefits from a diversified commodity mix, maintaining balanced exposure to oil, natural gas and natural gas liquids. Supported by continued investments in higher-margin U.S. oil-producing regions, Devon Energy continues to deliver strong hydrocarbon production volumes.DVN continues to expand its operation through acquisitions that boost its production and expand its asset base in high production regions. The closure of the acquisition of Grayson Mill Energy’s Williston Basin business increased Devon Energy’s net acre position in this basin to 430,000, which tripled the production volume to150,000 barrels of oil equivalents per day (Boe/d).Devon Energy generates free cash flow that provides liquidity to pay dividends, share buybacks and debts payment. DVN generated more than $2 billion in free cash flow in 2025 and used $1.27 billion for share buybacks and dividend payments. In the long term, subject to the board’s approval, the company plans to buy back shares in the range of $200-$300 million per quarter.The company projects capital expenditures of $3.5 to $3.7 billion during 2026 to strengthen its operations. It has been making strategic investments to upgrade and expand assets. A decline in interest rates will also benefit the company.DVN’s HeadwindsDevon Energy’s operations are subject to federal, state and tribal rules and regulations. Adherence to any changes in existing rules and regulations could further increase the cost of running the operation and adversely impact the business of the company.Devon Energy has a stake in some properties, which are being operated by third parties. As a result, the company has limited control over these operations or the fate of their future development.Price Performance of DVNIn the past three months, Devon Energy’s shares have gained 11.0% against the industry’s 1.1% decline. Image Source: Zacks Investment ResearchZacks Rank & Stocks to ConsiderDevon Energy currently carries a Zacks Rank #3 (Hold).Some better-ranked stocks in the same sector include Cenovus Energy CVE, TechnipFMC FTI and W&T Offshore WTI. While CVE currently sports a Zacks Rank #1 (Strong Buy), FTI and WTI carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here. CVE, FTI and WTI dividend yields are 3.49%,0.40% and 2.58%, respectively.The Zacks Consensus Estimate for 2026 earnings per share of Cenovus Energy, TechnipFMC and W&T Offshore is up 4.41%,1.11% and 4.35%, respectively, in the past 60 days.Free Report: Profiting from the 2nd Wave of AI ExplosionThe next phase of the AI explosion is poised to create significant wealth for investors, especially those who get in early. It will add literally trillion of dollars to the economy and revolutionize nearly every part of our lives.Investors who bought shares like Nvidia at the right time have had a shot at huge gains.But the rocket ride in the "first wave" of AI stocks may soon come to an end. The sharp upward trajectory of these stocks will begin to level off, leaving exponential growth to a new wave of cutting-edge companies.Zacks' AI Boom 2.0: The Second Wave report reveals 4 under-the-radar companies that may soon be shining stars of AI’s next leap forward.Access AI Boom 2.0 now, absolutely free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Devon Energy Corporation (DVN): Free Stock Analysis Report TechnipFMC plc (FTI): Free Stock Analysis Report W&T Offshore, Inc. (WTI): Free Stock Analysis Report Cenovus Energy Inc (CVE): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks