Buy Devon & Cimarex for an energy rebound

Article Excerpt

The direction of oil and gas prices depends on a lot of things, particularly economic growth rates around the world in the wake of COVID-19. Meanwhile, though, well-established companies in the industry have taken advantage of the setback to pick up properties and employees who might be harder to find in more-prosperous times. Those top companies also have the balance sheet strength to get through low prices—and keep paying dividends. That adds an extra layer of safety and helps support their share prices. Here are two we see as buys: CIMAREX ENERGY, $28.24, is a buy. The company (New York symbol XEC; TSINetwork Rating: Extra Risk) (www.cimarex.com; Shares outstanding: 102.0 million; Market cap: $2.9 billion; Dividend yield: 3.1%) produces and explores for natural gas and oil. Gas makes up 43% of the company’s output; the remaining 57% is oil. In the three months ended June 30, 2020, Cimarex produced an average 254,700 barrels of oil equivalent per day. That output is down 7.3% from 274,800 barrels…

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