Devon Energy Corporation (DVN) boosted its quarterly dividend by 6%, raising the second quarter 2011 dividend to 17 cents per share compared with the previous dividend rate of 16 cents. This increase brings Devon’s annualized dividend rate to 68 cents per share from the previous rate of 64 cents.
Devon also confirmed that the increased quarterly dividend will be paid on June 30, 2011, to shareholders of record as of June 15, 2011. Devon’s new annualized dividend rate reflects a current yield of 0.75%.
This dividend increase underscores Devon’s financial strength and management’s commitment to optimize shareholder returns. The current dividend hike is also incremental to Devon’s ongoing $3.5 billion share repurchase program and mirrors the board’s confidence in its underlying business.
Devon has been able to retain financial flexibility and liquidity by prudently managing its balance sheet. As of December 31, 2010, Devon’s cash balances totaled $3.4 billion, with net debt adjusted capitalization of 10% (compared with 29% at year-end 2009). Devon’s operating cash flow in 2010 increased 21% to $5.7 billion. The company added nearly $7 billion to its cash flows in 2010 from sale proceeds under its strategic repositioning efforts.
Some of the recent dividend announcements include, General Dynamics Corporation (GD) who, earlier this week, raised the quarterly dividend by 12% to 47 cents per share over its prior dividend of 42 cents. Last month, the company’s independent oil and gas peer, Occidental Petroleum Corporation (OXY) increased annual dividend by 21% to $1.84 per share from the previous rate of $1.52. This brought Occidental’s quarterly dividend rate to 46 cents per share.
Based in Oklahoma City, Oklahoma, Devon Energy is a major independent oil and gas exploration and production (E&P) company. Its oil and gas assets are principally located in the United States, Canada, Azerbaijan, China, Russia and Brazil. Besides the E&P business, Devon has marketing and midstream operations, primarily in North America.
Devon Energy currently has a Zacks #3 Rank (short-term Hold rating). We also maintain a long-term Neutral rating on the stock.
DEVON ENERGY (DVN): Free Stock Analysis Report
GENL DYNAMICS (GD): Free Stock Analysis Report
OCCIDENTAL PET (OXY): Free Stock Analysis Report
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