Energy Business

Goldman Sachs Says These 3 Top Energy Stocks Deliver Unique and Rising Dividends

The recurring dividend is 1.63%. Goldman Sachs has a price target of $37 for Devon Energy stock. The consensus target is $34.23, and the final trade for Friday hit the tape at $27.01.

Pioneer Natural Resources

Many Wall Street analysts love this stock as a pure crude oil play and, the company also is looking to employ variable dividends. Pioneer Natural Resources Co. (NYSE: PXD) operates a modern fleet of more than 24 top-performing drilling rigs throughout onshore oil and gas producing regions of the United States and Colombia. Pioneer production services are supported by 100 well-servicing rigs, more than 100 cased-hole, open-hole and offshore wireline units, and a range of advanced coiled tubing units.

Pioneer is a huge player in the Permian Basin and in the Eagle Ford in Texas, and the company owns more than 20,000 locations in the world’s second-largest oil reservoir in the Midland Basin. With a stellar balance sheet, the company is poised to remain a top player in the Permian, as it expects to deliver solid production growth in 2021 and beyond.

As of December 31, 2020, the company had proved undeveloped reserves and proved and developed non-producing reserves of 31 million barrels of oil, 17 million barrels of NGLs and 88 billion cubic feet of gas, and it owned interests in 11 gas-processing plants.

The company also posted outstanding results that beat the Goldman Sachs and Wall Street estimates and the analyst said this:

Pioneer updated its capital returns strategy in part due to current commodity prices, and plans to payout up to 75% of its excess free-cash-flow (versus 50% prior) after base dividend as variable dividend starting in the third quarter. With results, the company announced a $1.51 per share variable dividend on top of its base dividend of $0.56 per share or $2.07 per share of total dividend (5.8% annualized yield). We see potential for Pioneer’s total dividend to increase as its hedges roll-off — the company reported $0.6 billion (or ~$2.30 per share) in hedging losses during the quarter.

Pioneer Natural Resources stock investors receive a 2.10% dividend. The $196 Goldman Sachs price target is lower than the $208.27 consensus figure. The shares closed trading on Friday at $151.55 apiece.

These three top companies are rewarding shareholders in a way that is long overdue. With the potential for firm oil pricing the rest of 2021 and into next year, their stocks make sense for investors looking for energy positions that are great long-term holds.

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