Devon Energy's Ultra-High-Yield Dividend Is Facing an Unexpected Headwind
Devon Energy (NYSE: DVN) paid out a gusher of dividends in 2022. Fueled by higher oil prices and its innovative dividend strategy, Devon paid over $5 per share in dividends last year, more than double its total in 2021. That gave it a more than 8% yield on the recent share price, several times above the S&P 500's 1.7% dividend yield.
However, the oil company's last dividend payment was down from its peak level because of lower oil prices. Now, it's facing another headwind as severe winter weather affected its production in the fourth quarter. That issue is likely to weigh on the company's next dividend payment.
Devon Energy recently disclosed that severe winter weather across its operations would cause its fourth-quarter production to be below its forecast. The company expects its fourth-quarter output to be 15,000 barrels of oil equivalent per day (BOE/d), or 2% below the midpoint of its guidance range. As a result, the company anticipates its production to average 636,000 BOE/d, which includes 316,000 barrels of oil per day. That's below the company's 640,000-660,000 BOE/d guidance range.
Source Fool.com
