Critical Analysis: Devon Energy (DVN) versus The Competition

Devon Energy (NYSE:DVN) is one of 1,050 publicly-traded companies in the “Oil, Gas & Consumable Fuels” industry, but how does it contrast to its rivals? We will compare Devon Energy to related businesses based on the strength of its risk, dividends, analyst recommendations, profitability, valuation, earnings and institutional ownership.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Devon Energy and its rivals, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Devon Energy	0	3	25	2	2.97
Devon Energy Competitors	5961	26926	40745	2403	2.52

Devon Energy currently has a consensus target price of $60.72, suggesting a potential upside of 16.31%. As a group, “Oil, Gas & Consumable Fuels” companies have a potential upside of 16.90%. Given Devon Energy’s rivals higher possible upside, analysts plainly believe Devon Energy has less favorable growth aspects than its rivals.

Institutional and Insider Ownership

69.7% of Devon Energy shares are owned by institutional investors. Comparatively, 30.8% of shares of all “Oil, Gas & Consumable Fuels” companies are owned by institutional investors. 4.6% of Devon Energy shares are owned by insiders. Comparatively, 15.3% of shares of all “Oil, Gas & Consumable Fuels” companies are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Devon Energy and its rivals revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Devon Energy	$17.19 billion	$2.64 billion	12.40
Devon Energy Competitors	$10.76 billion	$5.51 billion	0.53

Devon Energy has higher revenue, but lower earnings than its rivals. Devon Energy is trading at a higher price-to-earnings ratio than its rivals, indicating that it is currently more expensive than other companies in its industry.

Volatility and Risk

Devon Energy has a beta of 0.49, indicating that its stock price is 51% less volatile than the S&P 500. Comparatively, Devon Energy’s rivals have a beta of -4.04, indicating that their average stock price is 504% less volatile than the S&P 500.

Dividends

Devon Energy pays an annual dividend of $1.28 per share and has a dividend yield of 2.5%. Devon Energy pays out 30.4% of its earnings in the form of a dividend. As a group, “Oil, Gas & Consumable Fuels” companies pay a dividend yield of 8.4% and pay out -119.8% of their earnings in the form of a dividend. Devon Energy has increased its dividend for 1 consecutive years. Devon Energy lags its rivals as a dividend stock, given its lower dividend yield and higher payout ratio.

Profitability

This table compares Devon Energy and its rivals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Devon Energy	16.67%	14.93%	7.91%
Devon Energy Competitors	-472.92%	19.47%	6.31%

Summary

Devon Energy beats its rivals on 9 of the 15 factors compared.

Devon Energy Company Profile

Devon Energy Corporation, an independent energy company, engages in the exploration, development, and production of oil, natural gas, and natural gas liquids in the United States. It operates in Delaware, Eagle Ford, Anadarko, Williston, and Powder River Basins. The company was founded in 1971 and is headquartered in Oklahoma City, Oklahoma.