5 Energy Stocks with Over 3% Dividend Yield

4. Devon Energy Corporation (NYSE:DVN)

Dividend Yield: 7.85% (As of May 11)

Devon Energy Corporation (NYSE:DVN) is a Delaware based company involved in the exploration of oil and gas across the US. The company is engaged in exploration at various sites including Rocky Mountains, Delaware Basin, Barnett Shale etc. 

Devon Energy Corp’s cash flow continues to expand allowing it to make massive pay-outs in dividends. Its quarterly dividend is a whopping $1.27 per share, one of the highest in the industry, up from $0.31 in 2021. 

The company laid out the dividend policy of fixed-plus-variable last year which is to say that it augments its quarterly dividend payments to shareholders with up-to 50% of its surplus cash flow each quarter. Speaking of surplus cash flow, the energy giant came out with 14% higher operating cash flow at $1.8 billion in the first quarter of 2022 than the previous quarter. 

Rising oil prices and gas demand in the near to medium future holds promise for increasing cash flows as well as dividend increases. On May 4, Truist analyst Neal Dingmann increased the price target on DVN to $100 from $91, keeping a ‘Buy’ rating on the shares. 

The analyst believes that the company is likely to continue its multi-pronged shareholder return program of leading with dividends coupled with “meaningful buybacks” that are anticipated to rise. The analyst also told investors in a research note that quarterly cash flows are also expected to rise to $2 billion in the next quarter.