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Devon Energy Corp DVN

Morningstar Rating
$44.07 +0.04 (0.08%)
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Company Report

Devon Earnings: Investors Should Consider This Higher-Quality US E&P Play at Current Valuations

Excluding the impact of derivatives, Devon Energy's sales marginally exceeded our fourth-quarter expectations, while production of 662 thousand barrels of oil equivalent per day, or mboe/d, exceeded our expectations of 637 mboe/d. However, production expenses were also a bit higher than we anticipated. Consequently, core earnings missed our expectations by roughly 5%. Our long-term view is relatively unchanged, though we will reduce our fair value estimate by $1 to $59 as we front-end load additional capital expenditures. However, 2024 production of 650 mboe/d was right in line with our expectations.

Price vs Fair Value

DVN is trading at a 26% discount.
Price
$43.83
Fair Value
$23.00
Uncertainty
High
1-Star Price
$48.27
5-Star Price
$32.90
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Devon's acreage is ideally located in the core portions of the basins in which it operates. That translates to above-average well performance and peer-leading supply costs.

Bears

After incorporating costs sunk on leasehold, acquisitions, exploration, and infrastructure, Devon's capital base inflates to a level that puts excess returns on capital out of reach.

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News

Trading Information

Previous Close Price
$44.04
Day Range
$44.0144.43
52-Week Range
$40.4857.13
Bid/Ask
$44.08 / $44.11
Market Cap
$28.21 Bil
Volume/Avg
692,175 / 9.1 Mil

Key Statistics

Price/Earnings (Normalized)
7.72
Price/Sales
1.85
Dividend Yield (Trailing)
6.52%
Dividend Yield (Forward)
6.52%
Total Yield
9.99%

Company Profile

Devon Energy, based in Oklahoma City, is one of the largest independent exploration and production companies in North America. The firm's asset base is spread throughout onshore North America and includes exposure to the Delaware, STACK, Eagle Ford, Powder River Basin, and Bakken plays. At year-end 2022, Devon's proved reserves totaled 1.8 billion barrels of oil equivalent, and net production that year was 611 thousand boe/d, of which oil and natural gas liquids made up 73% of production, with natural gas accounting for the remainder.
Sector
Energy
Industry
Oil & Gas E&P
Stock Style Box
Mid Value
Total Number of Employees
1,800

Competitors

Valuation

Metric
DVN
EOG
PXD
Price/Earnings (Normalized)
7.729.5810.92
Price/Book Value
2.342.362.37
Price/Sales
1.852.882.93
Price/Cash Flow
4.235.986.59
Price/Earnings
DVN
EOG
PXD

Financial Strength

Metric
DVN
EOG
PXD
Quick Ratio
0.831.960.66
Current Ratio
1.072.440.88
Interest Coverage
13.3864.8444.95
Quick Ratio
DVN
EOG
PXD

Profitability

Metric
DVN
EOG
PXD
Return on Assets (Normalized)
15.69%16.14%13.94%
Return on Equity (Normalized)
32.89%25.79%22.40%
Return on Invested Capital (Normalized)
22.08%21.71%18.32%
Return on Assets
DVN
EOG
PXD
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Economic Moat
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EOG
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PXD
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OXY
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HES
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FANG
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MRO
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APA
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AR
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