Devon Energy’s Chief Is a Trendsetter in Emphasizing Shareholder Returns

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Richard E. “Rick” Muncrief was a relatively under-the-radar executive at a small oil-and-gas explorer before the Covid pandemic. That changed last year when Muncrief, 63, became CEO of

Devon Energy

following its merger with his company, WPX Energy.

Muncrief now leads a $35 billion company, and has quickly become a trendsetter in the oil patch, with a generous shareholder-return policy that has inspired admirers—and copycats. That’s one reason that more than 60% of the analysts who cover Devon still have Buy ratings on the stock, even after its nearly 90% rise in the past year.

Devon lost nine cents a share in 2020, before Muncrief arrived. It is on track to earn $8.98 this year, helped by the steep rise in oil prices.

More of the company’s earnings are going to shareholders, who could receive about $4.75 a share this year. Devon now pays a variable dividend in addition to its fixed dividend of 64 cents a share, a strategy that allows the company to return a growing amount of cash to shareholders when times are good without the threat of a cut when times get tougher.

Devon currently has a dividend yield of about 9%—six times higher than the average S&P 500 company, Muncrief likes to point out. What’s more, he has employees on board, too. They “all own our stock and look forward to that quarterly dividend check just as much as you do,” he said on a first-quarter earnings call.

Write to Avi Salzman at [email protected]