As investors look for dependable income stocks, a newly restructured energy company looks like a smart bet, according to Credit Suisse. Analyst William Janela initiated coverage of Chesapeake Energy with an outperform rating, saying in a note to clients that the company is on much stronger footing after going through bankruptcy and rejoining the public markets last year. “CHK emerged from restructuring with a substantially stronger balance sheet and lower cost structure, unburdening it from the primary issues that saddled the legacy company. With two subsequent acquisitions, CHK has decisively pivoted to natural gas, which should position it to deliver above-average cash returns to shareholders,” Janela wrote. Energy stocks have outperformed in 2022, but they fell sharply on Monday as recession fears spurred a massive sell-off on Wall Street. Chesapeake fits that pattern, adding 44.7% year to date but coming off a 4.9% decline on Monday. Even with the big gains for the year, the stock does appear undervalued based on the cash it generates, Credit Suisse said. “At current strip prices, we see CHK generating ~$5bn of organic FCF and returning > $2.5bn in total dividends in 2023, a > 20% cash return yield. Share buybacks are additive to its formula; we forecast CHK executes the $1bn authorization by YE23, boosting its total cash return yield to > 25%,” Janela wrote. The stock could also see a boost in the second half of this year if an activist investor is successful in pressuring Chesapeake to offload more oil assets, Janela wrote. Credit Suisse set a price target of $115 per share for Chesapeake, which is roughly 23% above where the stock closed on Monday. — CNBC’s Michael Bloom contributed to this report.