Devon Energy (NYSE:DVN) Stock Price & Quote Analysis

DVN fundamental analysis
Snowflake Score
Valuation	5/6
Future Growth	1/6
Past Performance	6/6
Financial Health	5/6
Dividends	5/6

DVN Stock Overview

Devon Energy Corporation, an independent energy company, primarily engages in the exploration, development, and production of oil, natural gas, and natural gas liquids in the United States.

Rewards

Trading at 49% below our estimate of its fair value

Earnings grew by 1766.3% over the past year

Risk Analysis

Earnings are forecast to decline by an average of 8.5% per year for the next 3 years

Unstable dividend track record

Significant insider selling over the past 3 months

Devon Energy Corporation Competitors

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Coterra Energy

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Price History & Performance

Summary of all time highs, changes and price drops for Devon Energy
Historical stock prices
Current Share Price	US$65.55
52 Week High	US$79.40
52 Week Low	US$24.46
Beta	2.56
1 Month Change	24.36%
3 Month Change	-7.66%
1 Year Change	134.02%
3 Year Change	190.82%
5 Year Change	115.63%
Change since IPO	889.43%

Recent News & Updates

Aug 09

Devon Energy: Acquisition Of Validus Energy Is Another Great Move

Devon Energy's management delivers again with another accretive M&A transaction with strong cash flow yield. The purchase strengthens DVN's position in the Eagle Ford; delivering years worth of drilling inventory. DVN's management believes that the transaction will enable them to hasten the rate at which they are repurchasing stock. It appears that Devon Energy's (DVN) management team is on a roll with M&A activity. We previously highlighted the company's acquisition of RimRock in the Williston Basin, which was a good deal financially and operationally for Devon. The bolt-on strategy is a winning strategy in the energy sector and right now Devon certainly appears to have their M&A machine dialed in, with the Validus Energy deal announced this morning as further evidence. Deal Breakdown This all cash, $1.8 billion deal is another great bolt-on acquisition for Devon, as Validus actually improves and strengthens the Devon acreage position in Texas's Eagle Ford play. Below is a chart showing how the deal will improve Devon's acreage position based off of some key metrics: Devon Energy Investor Presentation Notice that the company is doubling its net acreage position, getting production with a higher percentage of oil production and nearly doubling production (it must also be pointed out that Devon's management believes that production will increase to 40,000 BOED over the next year). So the takeaway is that Devon, a company which already possesses top-tier assets, just enhanced their asset quality and production in the Eagle Ford while also locking up 350 drilling locations and 150 refrac candidates. Validus Energy's 90% working interest also puts Devon in the driver's seat for the management of this acreage. This acquisition dramatically increases Devon's acreage position in the Eagle Ford, specifically in the Karnes Trough oil window. (Devon Energy Investor Presentation) There should be considerable cost savings realized on the purchase, with management estimating $50 million in annual cash flow savings through efficiencies/synergies and improvements in operations. Our Take This deal has even more attractive metrics than the RimRock purchase as Devon is paying 2x cash flow and the transaction yields a 30% FCF yield (readers will remember that the RimRock deal was at 2.2x cash flow and a 25% FCF yield). Since the deal is being paid for with cash on hand, the acquisition will be immediately accretive over the first year as measured by all important metrics (Earnings Per Share, Free Cash Flow, Net Asset Value, etc.) and will improve the company's ability to increase the variable rate portion of the quarterly dividend. While this is a decent outflow of the company's cash and will lower its cash position, management was clear that this will not negatively impact Devon's $2 billion share repurchase program and should actually allow management to accelerate the pace of the overall program. The bottom line is that Devon's management is faced with few options to deploy its cash these days since they have already stated that their goal is to essentially maintain production over the long-term with potential incremental growth. Their CapEx program is funded and FCF is healthy, so aside from returning capital to shareholders via share repurchases and increased dividends Devon's management is forced to choose between holding low-yielding cash on the balance sheet (least desirable), continuing to pay down debt (more desirable as the company's weighted average fixed coupon is roughly 5.81%) or find attractive M&A opportunities which can generate significantly more cash flow than the other options for shareholders. Summary Devon Energy's shares have pulled back from the highs in June, but at current levels certainly appear attractive based on management's dividend policy, CapEx plans and current M&A strategy. It is one thing to talk about making good to great acquisitions, it is an entirely different exercise to actually deliver those M&A transactions for shareholders.

Aug 03

New Forecasts: Here's What Analysts Think The Future Holds For Devon Energy Corporation (NYSE:DVN)

Devon Energy Corporation ( NYSE:DVN ) shareholders will have a reason to smile today, with the analysts making...

Shareholder Returns

	DVN	US Oil and Gas	US Market
7D	15.7%	7.2%	3.2%
1Y	134.0%	58.4%	-10.2%

Return vs Industry: DVN exceeded the US Oil and Gas industry which returned 58.4% over the past year.

Return vs Market: DVN exceeded the US Market which returned -10.2% over the past year.

Price Volatility

Is DVN's price volatile compared to industry and market?
DVN volatility
DVN Average Weekly Movement	8.1%
Oil and Gas Industry Average Movement	8.8%
Market Average Movement	7.7%
10% most volatile stocks in US Market	16.9%
10% least volatile stocks in US Market	3.2%

Stable Share Price: DVN is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 8% a week.

Volatility Over Time: DVN's weekly volatility (8%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1971	1,600	Rick Muncrief	https://www.devonenergy.com

Devon Energy Corporation, an independent energy company, primarily engages in the exploration, development, and production of oil, natural gas, and natural gas liquids in the United States. It operates approximately 5,134 gross wells. Devon Energy Corporation was incorporated in 1971 and is headquartered in Oklahoma City, Oklahoma.

Devon Energy Corporation Fundamentals Summary

How do Devon Energy's earnings and revenue compare to its market cap?
DVN fundamental statistics
Market Cap	US$42.92b
Earnings (TTM)	US$5.21b
Revenue (TTM)	US$17.48b

8.2x

P/E Ratio

2.5x

P/S Ratio

Is DVN overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
DVN income statement (TTM)
Revenue	US$17.48b
Cost of Revenue	US$7.05b
Gross Profit	US$10.43b
Other Expenses	US$5.22b
Earnings	US$5.21b

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	7.95
Gross Margin	59.65%
Net Profit Margin	29.79%
Debt/Equity Ratio	63.2%

How did DVN perform over the long term?

See historical performance and comparison

Dividends

9.5%

Current Dividend Yield

46%

Payout Ratio

Does DVN pay a reliable dividends?

See DVN dividend history and benchmarks

When do you need to buy DVN by to receive an upcoming dividend?
Devon Energy dividend dates
Ex Dividend Date	Sep 09 2022
Dividend Pay Date	Sep 30 2022
Days until Ex dividend	25 days
Days until Dividend pay date	46 days