DVN - 1 Big Reason Pioneer Natural Resources Is a Better Long-term Choice than Devon Energy
2023-07-25 08:30:00 ET
Oil and natural gas prices are volatile and the ups and downs will drive the financial results of companies like Pioneer Natural Resources (NYSE: PXD) and Devon Energy (NYSE: DVN) . These drillers can't control that fact of their business, but there is another aspect of the operations of these U.S. drillers that is within each company's control. And Pioneer comes out on top.
Pioneer and Devon are energy drillers that have garnered a lot of attention of late because of their high dividend yields . Pioneer's stock yields around 11% today, while Devon's yield is roughly 9%. Those are very large numbers, given the average energy stock's yield is closer to 4%, using Vanguard Energy Index ETF as a proxy.
The reason their dividends are so high is because they have both adopted a variable dividend policy. Essentially, they have a base dividend that management at each company believes is sustainable. On top of that, both companies layer in a dividend that rises and falls along with financial performance. Since financial results for each of these energy companies are directly tied to oil and natural gas prices, total dividends also rise and fall along with energy prices.
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1 Big Reason Pioneer Natural Resources Is a Better Long-term Choice than Devon Energy