3 Reasons EOG Resources Inc Is a Better Growth Stock Than Devon Energy Corp
The oil market downturn forced shale drillers to cut costs so they can run on lower oil prices. Through a series of innovations, efficiency gains, and other sources, both EOG Resources (NYSE: EOG) and Devon Energy (NYSE: DVN) are now in the position to thrive even though crude remains weak. That's clear from the growth outlooks they provided investors now that conditions have improved, with both expecting to deliver double-digit oil production growth over the coming years at around current oil prices. That said, after drilling down deeper into their plans, it becomes apparent that EOG Resources is the better growth company.
In August of 2016, EOG Resources initially unveiled its oil production growth outlook through 2020, anticipating that it could increase crude production by a 10% compound annual rate through 2020 at a flat oil price of $50 a barrel. Meanwhile, it could boost output by a 20% compound annual rate over that same timeframe if oil averaged $60 a barrel. Further, it could achieve those robust growth rates and pay its dividend while living within cash flow. However, thanks to some additional innovations and efficiency gains, the company has since raised that outlook to 15% at $50 oil and 25% at $60.
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Source: Fool.com