We recently published a list of Why These Energy Stocks Are Gaining This Week. In this article, we are going to take a look at where Devon Energy Corporation (NYSE:DVN) stands against other energy stocks that are gaining this week.
The energy sector has outperformed the broader market so far this year, with gains of 2.7% against the general market’s surge of 1.48%. This comes after a disappointing 2024 when the energy sector lagged significantly behind gains of 25% by the wider market.
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As the world gets hungry for more and more energy, the International Energy Agency has forecasted the world’s electricity consumption to rise at its fastest pace in recent years, growing at close to 4% annually through 2027. The uptick can be mainly attributed to a surge in industrial production, increased demand for air conditioning, accelerating electrification, primarily by the transport sector, and the rapid expansion of data centers.
Electricity demand in the United States, the second-largest consumer in the world after China, is to grow at an average annual rate of about 2% over the period 2025-2027, driven by the strong demand growth from the data center sector.
Other sectors, including natural gas, also stand to benefit tremendously from the ongoing AI boom and the accompanying data centers, as several dozen new gas-fired power plants are expected to be built in the US in the next few years. According to data from S&P Global Commodity Insights, if even a quarter of the projected data center load is supplied by gas-fired generation, this would translate to a 2% increase in total US gas demand in 2040, providing some much-needed respite to a sector that has faced a series of challenges over the last year.
Methodology
To collect data for this article, we have referred to several stock screeners to find energy stocks that have surged the most between February 14 to February 24, 2025.
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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A group of technicians in hazmat suits inspecting a natural gas storage tank.
Devon Energy Corporation (NYSE:DVN)
Share Price Gains Between Feb. 14 – Feb. 24: 7.71%
Devon Energy Corporation (NYSE:DVN) is an oil and gas producer in the United States with a multi-basin portfolio. The company ended 2024 with exceptionally strong results, especially after the integration of its Grayson Mill assets. DVN’s Q4 2024 oil production reached an all-time high of 398,000 barrels per day, largely driven by the timing and productivity of its Eagle Ford wells. Its overall oil and gas production hit 848,000 barrels of oil equivalent per day (boed) during the quarter, topping prior estimates of 811,000 boed to 830,000 boed.
Devon Energy Corporation (NYSE:DVN) also strengthened its balance sheet by building cash in Q4 to about $850 million, up 25% from Q3. The company’s overall free cash flow for 2024 came in at $3 billion, of which $2 billion was returned to its shareholders. DVN declared a quarterly dividend of $0.24 per share, up 9.1% from its prior dividend of $0.22.
The impressive Q4 performance has encouraged Devon Energy Corporation (NYSE:DVN) to raise its guidance for 2025 by 2% to a new range of 805,000 boed to 825,000 boed.
Overall, DVN ranks 6th on our list of energy stocks that are gaining this week. While we acknowledge the potential for DVN to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than DVN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
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