DEVON ENERGY CORP (DVN) Stock Fundamental Analysis
NYSE:DVN - New York Stock Exchange, Inc. - US25179M1036 - Common Stock - Currency: USD
We assign a fundamental rating of 5 out of 10 to DVN. DVN was compared to 211 industry peers in the Oil, Gas & Consumable Fuels industry. While DVN has a great profitability rating, there are quite some concerns on its financial health. DVN has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
DVN had positive earnings in the past year.
DVN had a positive operating cash flow in the past year.
Of the past 5 years DVN 4 years were profitable.
DVN had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
The Return On Assets of DVN (9.02%) is better than 81.04% of its industry peers.
With an excellent Return On Equity value of 19.17%, DVN belongs to the best of the industry, outperforming 83.41% of the companies in the same industry.
With an excellent Return On Invested Capital value of 12.88%, DVN belongs to the best of the industry, outperforming 88.15% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for DVN is below the industry average of 23.79%.
The 3 year average ROIC (20.63%) for DVN is well above the current ROIC(12.88%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.02% | ||
| ROE | 19.17% | ||
| ROIC | 12.88% |
ROA(3y)16.63%
ROA(5y)7.21%
ROE(3y)34.79%
ROE(5y)8.28%
ROIC(3y)20.63%
ROIC(5y)N/A
1.3 Margins
DVN's Profit Margin of 16.61% is fine compared to the rest of the industry. DVN outperforms 67.77% of its industry peers.
In the last couple of years the Profit Margin of DVN has declined.
DVN has a better Operating Margin (26.00%) than 60.19% of its industry peers.
In the last couple of years the Operating Margin of DVN has grown nicely.
The Gross Margin of DVN (49.75%) is comparable to the rest of the industry.
DVN's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 26% | ||
| PM (TTM) | 16.61% | ||
| GM | 49.75% |
OM growth 3Y-0.73%
OM growth 5Y55.24%
PM growth 3Y-7.34%
PM growth 5YN/A
GM growth 3Y1.47%
GM growth 5Y-9.16%
2. Health
2.1 Basic Checks
DVN has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
The number of shares outstanding for DVN has been increased compared to 1 year ago.
Compared to 5 years ago, DVN has more shares outstanding
DVN has a worse debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 2.20 indicates that DVN is not a great score, but indicates only limited risk for bankruptcy at the moment.
DVN's Altman-Z score of 2.20 is fine compared to the rest of the industry. DVN outperforms 71.56% of its industry peers.
DVN has a Debt/Equity ratio of 0.58. This is a neutral value indicating DVN is somewhat dependend on debt financing.
DVN's Debt to Equity ratio of 0.58 is in line compared to the rest of the industry. DVN outperforms 43.13% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.58 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 2.2 |
ROIC/WACC1.45
WACC8.91%
2.3 Liquidity
A Current Ratio of 1.08 indicates that DVN should not have too much problems paying its short term obligations.
DVN has a Current ratio (1.08) which is in line with its industry peers.
A Quick Ratio of 0.99 indicates that DVN may have some problems paying its short term obligations.
The Quick ratio of DVN (0.99) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.08 | ||
| Quick Ratio | 0.99 |
3. Growth
3.1 Past
DVN shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -9.63%.
Measured over the past years, DVN shows a very strong growth in Earnings Per Share. The EPS has been growing by 31.25% on average per year.
DVN shows a very negative growth in Revenue. In the last year, the Revenue has decreased by -10.92%.
The Revenue has been growing by 20.71% on average over the past years. This is a very strong growth!
EPS 1Y (TTM)-9.63%
EPS 3Y11.12%
EPS 5Y31.25%
EPS Q2Q%4.31%
Revenue 1Y (TTM)-10.92%
Revenue growth 3Y9.3%
Revenue growth 5Y20.71%
Sales Q2Q%23.8%
3.2 Future
DVN is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 1.06% yearly.
The Revenue is expected to grow by 3.25% on average over the next years.
EPS Next Y-18.41%
EPS Next 2Y-6.95%
EPS Next 3Y1.96%
EPS Next 5Y1.06%
Revenue Next Year5.2%
Revenue Next 2Y2.3%
Revenue Next 3Y3.25%
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 6.96, the valuation of DVN can be described as very cheap.
84.83% of the companies in the same industry are more expensive than DVN, based on the Price/Earnings ratio.
Compared to an average S&P500 Price/Earnings ratio of 27.30, DVN is valued rather cheaply.
The Price/Forward Earnings ratio is 8.12, which indicates a very decent valuation of DVN.
Based on the Price/Forward Earnings ratio, DVN is valued a bit cheaper than 76.30% of the companies in the same industry.
DVN is valuated cheaply when we compare the Price/Forward Earnings ratio to 21.76, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 6.96 | ||
| Fwd PE | 8.12 |
4.2 Price Multiples
81.52% of the companies in the same industry are more expensive than DVN, based on the Enterprise Value to EBITDA ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 3.78 |
4.3 Compensation for Growth
The decent profitability rating of DVN may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)0.22
EPS Next 2Y-6.95%
EPS Next 3Y1.96%
5. Dividend
5.1 Amount
DVN has a Yearly Dividend Yield of 2.89%.
DVN's Dividend Yield is comparable with the industry average which is at 6.51.
Compared to an average S&P500 Dividend Yield of 2.37, DVN pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.89% |
5.2 History
The dividend of DVN is nicely growing with an annual growth rate of 34.02%!
DVN has paid a dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)34.02%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
28.72% of the earnings are spent on dividend by DVN. This is a low number and sustainable payout ratio.
DVN's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP28.72%
EPS Next 2Y-6.95%
EPS Next 3Y1.96%
33.97
+0.02 (+0.06%)
Chartmill FA Rating
GICS SectorEnergy
GICS IndustryGroupEnergy
GICS IndustryOil, Gas & Consumable Fuels
Earnings (Last)
Earnings (Next)
Inst Owners74.86%
Inst Owner Change0%
Ins Owners0.4%
Ins Owner Change0.52%
Market Cap21.81B
Analysts78.24
Price Target45.07 (32.68%)
Short Float %2.72%
Short Ratio2.03
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.89% |
Yearly Dividend1.46
Dividend Growth(5Y)34.02%
DP28.72%
Div Incr Years0
Div Non Decr Years0
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)5.1%
Min EPS beat(2)-4.28%
Max EPS beat(2)14.49%
EPS beat(4)2
Avg EPS beat(4)5.17%
Min EPS beat(4)-4.28%
Max EPS beat(4)14.49%
EPS beat(8)4
Avg EPS beat(8)3.4%
EPS beat(12)7
Avg EPS beat(12)2.94%
EPS beat(16)11
Avg EPS beat(16)5.09%
Revenue beat(2)2
Avg Revenue beat(2)1.9%
Min Revenue beat(2)0.2%
Max Revenue beat(2)3.6%
Revenue beat(4)3
Avg Revenue beat(4)2.48%
Min Revenue beat(4)-0.38%
Max Revenue beat(4)6.51%
Revenue beat(8)6
Avg Revenue beat(8)1.75%
Revenue beat(12)9
Avg Revenue beat(12)2.61%
Revenue beat(16)12
Avg Revenue beat(16)2.98%
PT rev (1m)-0.99%
PT rev (3m)-10.68%
EPS NQ rev (1m)0.41%
EPS NQ rev (3m)-23.77%
EPS NY rev (1m)-1.93%
EPS NY rev (3m)-18%
Revenue NQ rev (1m)-0.1%
Revenue NQ rev (3m)-5.75%
Revenue NY rev (1m)-0.48%
Revenue NY rev (3m)-4.02%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 6.96 | ||
| Fwd PE | 8.12 | ||
| P/S | 1.3 | ||
| P/FCF | N/A | ||
| P/OCF | 3.21 | ||
| P/B | 1.5 | ||
| P/tB | 1.58 | ||
| EV/EBITDA | 3.78 |
EPS(TTM)4.88
EY14.37%
EPS(NY)4.18
Fwd EY12.31%
FCF(TTM)-1.07
FCFYN/A
OCF(TTM)10.6
OCFY31.19%
SpS26.16
BVpS22.65
TBVpS21.48
PEG (NY)N/A
PEG (5Y)0.22
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.02% | ||
| ROE | 19.17% | ||
| ROCE | 15.99% | ||
| ROIC | 12.88% | ||
| ROICexc | 13.47% | ||
| ROICexgc | 13.87% | ||
| OM | 26% | ||
| PM (TTM) | 16.61% | ||
| GM | 49.75% | ||
| FCFM | N/A |
ROA(3y)16.63%
ROA(5y)7.21%
ROE(3y)34.79%
ROE(5y)8.28%
ROIC(3y)20.63%
ROIC(5y)N/A
ROICexc(3y)21.8%
ROICexc(5y)N/A
ROICexgc(3y)22.62%
ROICexgc(5y)N/A
ROCE(3y)25.62%
ROCE(5y)N/A
ROICexcg growth 3Y-9.4%
ROICexcg growth 5Y53.9%
ROICexc growth 3Y-8.79%
ROICexc growth 5Y55.35%
OM growth 3Y-0.73%
OM growth 5Y55.24%
PM growth 3Y-7.34%
PM growth 5YN/A
GM growth 3Y1.47%
GM growth 5Y-9.16%
F-Score5
Asset Turnover0.54
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.58 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 1.08 | ||
| Cap/Depr | 217.5% | ||
| Cap/Sales | 44.61% | ||
| Interest Coverage | 9.43 | ||
| Cash Conversion | 87.1% | ||
| Profit Quality | N/A | ||
| Current Ratio | 1.08 | ||
| Quick Ratio | 0.99 | ||
| Altman-Z | 2.2 |
F-Score5
WACC8.91%
ROIC/WACC1.45
Cap/Depr(3y)204.69%
Cap/Depr(5y)159.27%
Cap/Sales(3y)33.12%
Cap/Sales(5y)27.97%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-9.63%
EPS 3Y11.12%
EPS 5Y31.25%
EPS Q2Q%4.31%
EPS Next Y-18.41%
EPS Next 2Y-6.95%
EPS Next 3Y1.96%
EPS Next 5Y1.06%
Revenue 1Y (TTM)-10.92%
Revenue growth 3Y9.3%
Revenue growth 5Y20.71%
Sales Q2Q%23.8%
Revenue Next Year5.2%
Revenue Next 2Y2.3%
Revenue Next 3Y3.25%
Revenue Next 5YN/A
EBIT growth 1Y-24.78%
EBIT growth 3Y8.5%
EBIT growth 5Y87.39%
EBIT Next Year78.23%
EBIT Next 3Y23.94%
EBIT Next 5Y16.95%
FCF growth 1Y-124.98%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-18.71%
OCF growth 3Y10.44%
OCF growth 5Y26.09%