Daily Stock Pick for September 6, 2023

Yesterday, we looked at three stocks that could deliver some fast gains over the next few days.

So today, we’ll look at the opposite – a high-yield dividend stock you can just stash away in your portfolio as it continues to pay you one juicy dividend after another.

Today’s daily pick is from the energy sector…

Which is poetic because indexes closed lower yesterday thanks to a jump in crude oil prices as a result of Saudi Arabia and Russia extending their supply cuts.

This was negative for stocks as a whole – but positive for energy stocks.

Here are a few highlights for today’s pick:

  • A 9%+ dividend yield
  • Is still trading at a bargain with a P/E ratio under 7.5x
  • Will see cumulative benefits from higher oil prices

With geopolitical tensions still high and oil prices looking to surge, this is one dividend play that could deliver both high income and substantial capital gains – but only if you act fast.

Devon Energy Corporation (DVN)

Unlike many of the energy names that’ve been featured here, Devon Energy is not a midstream player. It owns and operates both oil and natural gas wells across North America – meaning it is directly exposed to the fluctuation in oil and gas prices.

And with oil prices now sitting at a 10-month high thanks to the aforementioned supply cuts, the outlook is good for Devon Energy’s stock. This is particularly the case after a tough year for oil and gas stocks (from falling prices) – which saw Devon Energy suffer declining earnings and a plunging stock price.

As such, Devon Energy is now sitting at bargain-bin prices – all while oil prices look set to surge. This is a huge positive for the company, especially because Devon Energy is operationally sound, with its oil output hitting an all-time high in the second-quarter, with the company only expecting it to further increase. 

It’s also been able to lock in lower rates with service providers thanks to the lower oil prices, which gives it further margin expansion potential as oil prices recover.

All in, Devon Energy is a high-yield energy stock trading at a bargain – meaning it could deliver both steady income and significant capital gains.

To your wealth,
Felix @ Ace of Investing