Devon Energy (DVN)
The spike in oil prices owes much to market optimism, global production disruptions, and geopolitical tensions – a combustible mix fueling the rally. Notably, U.S. energy player Devon Energy (NYSE:DVN) is gearing up for some serious action. Despite facing a 43% drop in free cash flow due to sliding natural gas prices, DVN smashed Q3 earnings estimates and now sets its sights on pumping up production even further in Q4.
Setting its capital efficiency in stone, DVN is revving up its growth engines. With a planned production surge of 640-660 MBOE/d and capital expenses between $870-$930 million, the company is putting pedal to the metal. Devon Energy’s concentration on optimizing Delaware assets and core operations, despite trailing its competitors in share performance, is setting the stage for a roaring comeback.
The lure of Devon Energy doesn’t end there. Institutional investors are flocking to the party – Acadian Asset Management LLC, Blair William & Co., and AlphaCrest Capital Management LLC are all in on the game. Moreover, heavyweights like Canada Pension Plan Investment Board and Sei Investments Co. are increasing their stakes in this energy standout. The buying frenzy among institutions signals a green light for retail investors to hop on the bandwagon.
Occidental Petroleum (OXY)
When it comes to energy heavyweights, Occidental Petroleum (NYSE:OXY) shines bright. Sporting Warren Buffett as a significant shareholder, OXY boasts a 28.5% stake held by the famed investor. The oil giant’s Permian Basin assets and recent acquisitions, like the $12 billion CrownRock deal, have positioned it for stellar growth. As large investors scour the energy market for top performers, Occidental Petroleum emerges as a prime candidate at the table of champions.
Buoyed by a winning mix of high-performing assets and a leading role in carbon capture technology (exemplified by the SRATOS project in Texas), OXY is primed for a journey towards the stars. The fact that Buffett stands firmly behind this energy titan speaks volumes, making Occidental Petroleum an attractive pick for most investors seeking a blend of stability and growth prospects.
Phillips 66 (PSX)
Phillips 66 (NYSE:PSX) might have outpaced the market with a robust 65% surge over the past three years, but its recent one-year return of 41% suggests a shift in market sentiments. Despite potential near-term losses, any uptick in bottom-line performance typically correlates with upward share trajectories.
Trading at $146.10 per share, Phillips 66 has been on a positive trajectory, delivering over 40% returns over the past year. The company’s diversified and vertically-integrated business model continues to attract investors seeking reliable cash flows and earnings in the energy sector. Priced at less than 10-times earnings post its recent rally, PSX remains an enticing option for those eyeing further growth in the oil and gas sector.
If prospects for enhanced bottom-line growth remain on the horizon, Phillips 66 might just be the ticket to a turbocharged ride in the world of energy investing.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
