In a recent analysis of the top energy dividend stocks to buy, Devon Energy Corporation (NYSE:DVN) has earned a spot among the leading choices for income-focused investors. This article delves into how Devon Energy compares with other energy dividend stocks that are currently favored by analysts.
The energy sector’s weight within the broader U.S. stock market has shifted over the years. In the 1970s, it represented approximately 15% of the market. Today, however, it accounts for just 3.2% of the overall index, according to U.S. Bancorp Investments. Despite this decline in market share, energy consumption has grown, and the sector’s influence on the economy remains substantial. Analysts argue that energy stocks play a more significant role in the broader market than their modest index weighting suggests.
Throughout 2024, the energy sector experienced notable volatility. In November, energy stocks surged by over 6%, only to fall nearly 10% in December. By the end of the year, the sector—which had been up nearly 20% at its peak—closed with a modest return of 5.72%, underperforming the broader market. Rob Haworth, senior investment strategy director at U.S. Bank Asset Management, attributed this performance to market reactions to energy price fluctuations.
“As 2024 came to a close, markets responded to the environment for energy prices. In part, it reflects concern that OPEC+ may soon increase production, adding to an already solid supply situation. The oil market remains well-supplied, but global demand is lagging, particularly from major consumers like China and Europe,” Haworth explained.
While energy stocks fell short of investor expectations, the shift toward low-carbon energy gained momentum in 2024. Global investments in the energy transition rose by 11%, reaching a record $2.1 trillion, according to BloombergNEF’s (BNEF) Energy Transition Investment Trends 2025 report. This growth was driven primarily by investments in electrified transportation, renewable energy, power grids, and energy storage—sectors that saw new highs last year. However, the rate of growth slowed compared to previous years, when annual increases ranged from 24% to 29%.
BNEF’s report also emphasized a growing divide between investments in established and emerging clean energy technologies. Proven, scalable sectors such as renewables, energy storage, electric vehicles, and power grids made up the bulk of the 2024 investments, totaling $1.93 trillion, a 14.7% increase. This sustained growth persisted despite challenges like policy changes, rising interest rates, and a slowdown in consumer demand.
Even with the decline in oil prices, many fossil fuel companies are increasingly prioritizing shareholder returns. This shift is evident in their higher dividend payouts and share buybacks. Some of the largest oil firms have even taken on debt to maintain these payouts. Between July and September 2024, four of the world’s five largest oil supermajors borrowed $15 billion combined to fund share buybacks, underscoring their commitment to rewarding investors. Moreover, energy companies distributed over $49 billion in dividends during the third quarter of 2024, a significant increase from $32.2 billion in the same period three years ago, as reported by Janus Henderson.
As energy companies continue to allocate more capital to shareholders, stocks like Devon Energy, with its strong dividend yield and stability, remain highly attractive to investors seeking reliable income in a fluctuating market.
You Might Be Interested In:
