Investors looking to buy shares to protect themselves from global uncertainty in light of the Russia-Ukraine war must pay attention to Devon Energy, CNBC’s Jim Kramer said Friday.
The Mad Money presenter’s recommendation came hours after he interviewed Devon CEO Rick Muncriff during CNBC Investing Club’s monthly meeting for subscribers. Cramer’s Charitable Trust owns Devon shares, which were the best performing stocks in the S&P 500 last year. It continues to rise in 2022 as oil and natural gas prices rise.
“I accept calls during the monthly meeting. One caller asked me what a good hedge would be against all the craziness outside. I said it was very simple: owning oil and gas, “Kramer said before changing that answer.
“I should have even made it easier. “Own Devon Energy – this is your insurance policy against ongoing geopolitical chaos,” he said.
Devon Energy has taken a disciplined approach to oil drilling, even as barrel prices have risen in recent months. Instead, the company has focused its efforts on expanding its free cash flow and returning more capital to shareholders, introducing a variable dividend in addition to the fixed quarterly payout.
Kramer wondered if Devon would increase production in an attempt to take advantage of oil prices, which are well north of the company’s profit margin. Muncriff told Cramer on Friday that Devon would not do so, adding: “Our plan is our plan.”
Kramer suggested that Muncriff’s response helped boost his confidence in the stock, noting that the company was also “using this moment of force to pay off the debt”.
“Oil currently accounts for about 4% of the S&P 500. It used to be much higher. I’d say that’s very wrong,” Kramer said. “It should be much higher now, with companies like Devon being extremely disciplined and aggressively giving back money to shareholders.”
Disclosure: Cramer’s Charitable Trust owns shares in Devon Energy.
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