10 Most Undervalued Energy Stocks to Buy According to Hedge Funds

8. Devon Energy Corporation (NYSE:DVN)

No. of Hedge Fund Holders: 55

Forward P/E Ratio as of May 2: 7.93

Devon Energy Corporation (NYSE:DVN) is a leading independent energy company engaged in finding and producing oil and natural gas, with operations focused onshore in the United States.

Devon Energy Corporation (NYSE:DVN) had a strong Q4 2024 as its adjusted EPS of $1.16 topped expectations of $1. The company’s revenue also increased by 6.22% YoY to $4.4 billion, beating estimates by around $155.3 million. Devon’s oil production reached an all-time high of 398,000 bpd during the quarter, while its overall production came in at 848,000 boe/d. Such a strong performance was aided by the contribution from the Williston Basin business, which Devon acquired from Grayson Mill Energy in a $5 billion deal last year.

Devon Energy Corporation (NYSE:DVN) has invested heavily to grow its scale across several key U.S. oil and gas production basins to reduce costs and enhance its ability to produce free cash flow. As a result, the company reported $3 billion in free cash flow last year, with the goal to generate an additional $1 billion by the end of 2026. The oil and gas producer aims to achieve this by reducing drilling and completion costs and improving operating margins. DVN also returned $2 billion to its shareholders in 2024 and is now targeting up to a 70% cash return payout at current strip pricing.