Devon Energy (NYSE:DVN) also has underperformed in 2013, but has high hopes going forward. With a market capitalization of over $21 billion, DVN is one of the largest players in the space. It was cobbled together with a series of acquisitions in the early 2000s, and has a dominant position in the industry with some 25,000 wells in the U.S. — including a particular focus on the Barnett Shale in Texas.
Like Encana, Devon closed out a rough 2012 that was characterized by soft natural gas prices and an operating loss for the fiscal year. But things are turning around as gas prices move higher. Right now, 26 analysts have price targets on DVN stock, and all are above current valuations with a median target of $70 a share.
Devon Energy boasts a big war chest and a decent valuation. Specifically, DVN has almost $7 billion in cash and short-term investments and a forward P/E that is presently around 10. The dividend isn’t impressive at a 1.7% annual yield, but payouts have increased almost tenfold in the past decade, so there is long-term income potential here.