Devon Energy (DVN) cut its dividend last quarter based on lower adjusted free cash flow, and it may do so again. But it still makes sense to short out-of-the-money (OTM)puts both for income and to average-cost buy in the stock over time. As it stands today at $47.19, DVN stock still looks worth buying in, especially if an OTM strike price short put trade is exercised.
This was discussed in my last article on May 29, “Devon Energy Stock Treads Water As Its Put Premiums Wither.” The quarterly dividend fell due to a cut in the variable portion of the dividend, which is based on 50% of the net free cash flow (FCF) produced each quarter.
