Better Buy: Devon Energy vs. NextEra Energy Stock
The energy sector is ripe for stock-picking right now. Falling crude oil and natural gas prices, rising interest rates, and broader fears of a slowdown have hit share prices, offering investors a great opportunity to park some money in promising stocks, especially ones that also pay big dividends. Devon Energy (NYSE: DVN) and NextEra Energy (NYSE: NEE) are top contenders, with both stocks losing ground in recent months. Here's the better stock between the two to buy right now.
George Budwell (Devon Energy): Devon Energy is an Oklahoma-based energy company specializing in U.S. onshore drilling. It sports a premier portfolio of U.S.-based shale basins, including the Anadarko Basin, Delaware Basin, Powder River Basin, Williston Basin, and Eagle Ford. Thanks to its advantageous location, Devon has generated stellar well performance and peer-leading production costs in recent years. In the first quarter of 2023, for instance, the company hit an all-time production high of 320,000 barrels of oil per day.
What's the investing thesis? Apart from its stellar operating efficiencies and relatively low-risk production facilities, Devon stock has a highly attractive valuation and a sky-high dividend yield. On the valuation side, the company's stock is currently trading at a forward-looking 14% earnings yield. Thus, its shares are a downright bargain relative to a risk-free asset such as a 10-year U.S. Treasury bill.
Source Fool.com
