Devon Energy is an 'insurance policy' against geopolitical chaos, according to Jim Cramer.

• CNBC's Jim Cramer advised stock investors to own Devon Energy to protect against geopolitical uncertainty, stating this on Friday.
• Earlier Friday, the CEO of the company was interviewed by the "Mad Money" host for the CNBC Investing Club's monthly meeting.
• As oil and natural gas prices have increased, the company has been moving upward in 2022.

CNBC's Jim Cramer advised investors to invest in gold as a hedge against global uncertainty caused by the Russia-Ukraine war.

The "Mad Money" host recommended Devon stock after interviewing its CEO during the CNBC Investing Club's monthly meeting. Cramer's Charitable Trust owns shares of Devon, which was the best-performing stock in the S&P 500 last year and has continued to rise in 2022 due to the increase in oil and natural gas prices.

During the monthly meeting, I receive calls and one caller inquired about a hedge against the chaos. I responded by stating that it is straightforward: owning oil and gas stocks. However, I later modified my response.

"Your insurance policy against continued geopolitical chaos is owning Devon Energy," he said.

Devon Energy has prioritized a controlled drilling strategy for oil, despite the recent increase in per-barrel prices. The company has shifted its focus to increasing its free cash flow and returning more capital to shareholders, by introducing a variable dividend in addition to a fixed quarterly payout.

Cramer pondered if Devon would boost its output to take advantage of oil prices above the company's breakeven point. On Friday, Muncrief informed Cramer that Devon would not be increasing production, stating, "Our plan remains our plan."

Cramer stated that Muncrief's response bolstered his belief in the stock, as the company is utilizing this period of strength to reduce its debt.

"Cramer believes that oil should be much higher in the S&P 500, despite currently representing only about 4%, due to companies like Devon being disciplined and returning cash to shareholders aggressively."

Disclosure: Cramer's Charitable Trust owns shares of Devon Energy.

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