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Is Devon Energy Corp (NYSE:DVN) the Best Income Stock in 2024?

We recently published a list of 10 Best Dividend Stocks to Buy According to Billionaire Leon Cooperman. Since Devon Energy Corp (NYSE:DVN) ranks 3rd in the list, it deserves a deeper look.

Billionaire Leon Cooperman made headlines in April when he predicted during an interview with CNBC that the US is headed for a financial crisis. Cooperman, who calls himself a “capitalist with a heart,” said that the Federal Reserve kept interest rates near zero, but raised them dramatically in a period of 12 months. Still, the 81-year-old billionaire sees no signs that the economy is “restrictive,” as he pointed to stock market highs and speculation. The  Omega Family Office chairman and CEO expects “one or two” rate cuts this year. He emphasized that the market remains overvalued.

This isn’t the first time Cooperman warned the market about recession. In February last year, the billionaire said that the market was headed for a recession, and noted that the S&P 500 high of about 4,800 recorded in 2022 could “stand for some time.” In July 2022, while talking to Bloomberg, Cooperman said that he was “shocked” that interest rates were so low.

“I am of the view that equities are the best house in the financial asset in the neighborhood, but I don’t like the neighborhood, for a lot of reasons.”

Cooperman in the Bloomberg interview in 2022 had categorically said that sooner or later the strong dollar, prices of oil and the Fed would “lead us into a recession.” He went on to add that recession would be a “2023 event” and predicted that the market would bottom somewhere near 35% to 45% below its peak of 4800.

READ NEXT: Billionaire Paul Tudor Jones’ Top Dividend Picks and Analysts Are Upgrading These AI Stocks

The billionaire had said that he would be “very surprised” if we were to see another bull market anytime soon, given his view that we’ve had one of the biggest bull runs driven by FAANG, SPACs, and speculation. The AI revolution that started in 2023 was indeed a shocker for Cooperman as his recession predictions were proven wrong.

For this article, we scanned billionaire Cooperman’s Q1’2024 portfolio and chose his top 10 dividend stock picks. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).

Devon Energy Corp (NYSE:DVN)

Number of Hedge Fund Investors: 44

Billionaire Leon Cooperman’s Stake: $110,396,000

Upstream energy giant Devon Energy Corp (NYSE:DVN) is a notable dividend stock popular among hedge funds. During the first quarter, the company’s production beat its guidance by 4%, driven by strong activity in the Delaware Basin. Devon’s FCF hit $844 million, representing its 15th consecutive quarter of strong FCF generation. Devon Energy Corp (NYSE:DVN) also increased its 2024 production guidance to about 665 thousand barrels / day. Devon Energy Corp (NYSE:DVN) is allocating a whopping 30% of the FCF for shareholder returns, with $3 billion share buyback authorization in place. Analysts believe Devon Energy Corp (NYSE:DVN)’s low net debt-to-EBITDAX of 0.7x and high growth estimates make it an undervalued play.

Devon Energy Corp (NYSE:DVN) is currently trading at a P/E multiple of 8.9,  lower than Devon Energy Corp’s (NYSE:DVN) five-year average P/E of 10.84 as well as the industry mean of 10.73. Wall Street analysts have an average price target of $58.45 for Devon Energy Corp (NYSE:DVN)about 20% higher than the stock’s current levels.  Devon Energy Corp (NYSE:DVN) has a $3 billion share buyback authorization in place, which is about 10% of its outstanding shares. In the first quarter alone Devon Energy Corp (NYSE:DVN) returned $430 million to shareholders through dividends and buybacks.

As of the end of the first quarter of 2024, 44 hedge funds tracked by Insider Monkey reported owning stakes in Devon Energy Corp (NYSE:DVN).

Overall, Devon Energy Corp (NYSE:DVN) ranks 3rd in Insider Monkey’s list of the 10 Best Dividend Stocks to Buy According to Billionaire Leon Cooperman. You can visit the 10 Best Dividend Stocks to Buy According to Billionaire Leon Cooperman to see the other Billionaire Leon Cooperman’s 2024 stocks that are on his radar. While we acknowledge the potential of Devon Energy Corp (NYSE:DVN), our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than Devon Energy Corp (NYSE:DVN) but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: Michael Burry Is Selling These Stocks and Jim Cramer is Recommending These Stocks.

Disclosure: None. This article is originally published at Insider Monkey.

The $250 Trillion AI Hype is Real. A few years from now, you’ll probably wish you’d bought this stock.

When Jeff Bezos said that one breakthrough technology would shape Amazon’s destiny, even Wall Street’s biggest analysts were caught off guard.

Fast forward a year and Amazon’s new CEO Andy Jassy described generative AI as a “once-in-a-lifetime” technology that is already being used across Amazon to reinvent customer experiences.

At the 8th Future Investment Initiative conference, Elon Musk predicted that by 2040 there would be at least 10 billion humanoid robots, with each priced between $20,000 and $25,000.

Do the math. According to Musk, this technology could be worth $250 trillion by 2040.

Put another way, that’s roughly equal to:

  • 175 Teslas
  • 107 Amazons
  • 140 Metas
  • 84 Googles
  • 65 Microsofts
  • And 55 Nvidias

And here’s the wild part — this $250 trillion wave isn’t tied to one company, but to an entire ecosystem of AI innovators set to reshape the global economy.

It’s a leap so massive, it could reshape how businesses, governments, and consumers operate worldwide.

Even if that $250 trillion figure sounds ambitious, major firms like PwC and McKinsey still see AI unlocking multi-trillion-dollar potential.

How could anything be worth that much?

The answer lies in a breakthrough so powerful it’s redefining how humanity works, learns, and creates.

And this breakthrough has already set off a frenzy among hedge funds and Wall Street’s top investors.

What most investors don’t realize is that one under-owned company holds the key to this $250 trillion revolution.

In fact, Verge argues this company’s supercheap AI technology should concern rivals.

Before I reveal the details, let’s talk about how some of the richest people on the planet are positioning themselves.

  • Bill Gates sees artificial intelligence as the “biggest technological advance in my lifetime,” more transformative than the internet or personal computer, capable of improving healthcare, education, and addressing climate change.
  • Larry Ellison — through Oracle, is spending billions on Nvidia chips and partnering with Cohere to embed generative AI across Oracle’s cloud and apps.
  • Warren Buffett — not known for tech hype — says this breakthrough could have a ‘hugely beneficial social impact.

When billionaires from Silicon Valley to Wall Street line up behind the same idea — you know it’s worth paying attention to.

Even as we admire what Tesla, Nvidia, Alphabet, and Microsoft have built, we believe an even greater opportunity lies elsewhere…

But the real story isn’t Nvidia — it’s a much smaller company quietly improving the critical technology that makes this entire revolution possible.

And judging by what I’m hearing from both Silicon Valley insiders and Wall Street veterans…

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