Why Devon Energy Stock Surged 12% in August
Shares of Devon Energy (NYSE: DVN) rallied 12.4% in August, according to data provided by S&P Global Market Intelligence. Fueling the oil producer's gain was its second-quarter results and news it's buying more cash-gushing oil assets. That continued the oil stock's ferocious rally this year, with shares rocketing more than 50% higher thanks to higher crude prices.
Devon Energy started August off with a bang. The company reported strong second-quarter results, highlighted by record free cash flow. Devon's operating free cash flow more than doubled year over year to $2.7 billion. It kept capital expenses to 22% of that total, enabling it to produce $2.1 billion in free cash, the highest quarterly total in its 51-year history.
That gave Devon Energy a gusher of free cash flow to return to shareholders. Driven by its innovative fixed-plus-variable dividend program, the company paid investors $1.55 per share in dividends last quarter. That's 22% above its prior rate, setting a new record for the company. Devon also continued buying back shares. Through the end of July, it has repurchased 23.9 million shares, or 4% of shares outstanding, for $1.2 billion. Even with those cash returns, the company's cash balance rose by $823 million to $3.5 billion against $6.5 billion of debt.
Source Fool.com
