Investors who want to acquire shares to protect against global uncertainty in light of the Russo-Ukrainian war should look into it Devon EnergyCNBC’s Jim Cramer said Friday.
The recommendation of the “Mad Money” host came hours After the interview Devon CEO Rick Mincrief during CNBC Investing Club’s monthly meeting of subscribers. Cramer’s Charitable Trust owns shares in Devon, which was the best-performing stock in the S&P 500 last year. It will continue to rise in 2022 with higher oil and natural gas prices.
“I get calls during the monthly meeting,” Kramer said, before adjusting the answer. “One caller asked me what would be a good hedge against all the craziness out there. I said it was really simple: to have oil and gas stocks.”
“I should have made it easier. Own Devon Energy – this is your insurance policy against the ongoing geopolitical chaos,” he said.
Devon Energy has taken a disciplined approach to oil exploration, even as barrel prices have soared in recent months. Instead, the company focused its efforts on expanding free cash flow, returning more capital to shareholders, and creating variable dividend payouts as well as fixed quarterly payments.
Kramer was wondering if Devon would increase its production, in an effort to take advantage of oil prices that lie north of the company’s break-even level. reprehensible Kramer said Friday that Devon won’t, adding: “Our plan is our plan.”
Cramer noted that Mincrief’s answer helped boost his confidence in the stock, noting that the company is “using this moment of strength to pay off debt.”
“Right now oil is about 4% of the S&P 500,” Cramer said. “It was much higher than that. I’d say that’s very wrong.” “It should be much higher now, with companies like Devon being very disciplined and aggressively returning money to shareholders.”
Disclosure: The Kramer Charitable Fund owns shares in Devon Energy.
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