DVN Investment Analysis Report & Stock Research, Devon Energy Corp.

Devon Energy Corporation (DVN)

DVN Stock Report

2-Year Price History

View Larger DVN Chart
NYSE:DVN
$67.32
(2/9 2:58PM)
+1.8%
Open$67.11 Mkt Cap$29.4 Billion
High$68.46 52Wk High$76.79
Low$66.5 52Wk Low$38.55
Volume3.1 Million Avg Vol 10D3.8 Million

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DVN Revenue

As a value investing shop, we are interested in seeing how DVN's revenues measure up against past performances. One easily understandable way of doing that is to compare Price to Sales per share levels over a given time frame. Assuming it is available, Ockham prefers to look at ten years of history (for this stock there are 10 years of history available) and we weigh recent years more heavily. This allows us to find weighted average historical high and low Price to Sales ratios, which give us a better idea of the stock's current underlying value. Using this method, we have established a high range for Price to Sales of 2.87x and the low end of the range at 1.62x.

With respect to these historically rational metrics, notice that the current Price to Sales per share ratio for DVN of 3.32x is significantly above its historical average. This places DVN at the upper end of its historical range relative to sales per share and makes it difficult to suggest an attractive price outlook. At current sales per share levels, we would need to see a decline in the Price to Sales ratio of 48% merely to return DVN to its historical average.

DVN Cash Earnings

DVN is not forecasted to produce positive Cash Earnings this year, based on recent performance. This is not a positive situation, as we would always prefer that a company is producing cash every year. However, it is important to recognize that not all companies or types of companies have the goal of producing positive Cash Earnings either early in their business cycle or following significant turnaround changes. When looking at DVN, we hesitate to be overly negative on the company, but it is of concern that the company is not profitable at this time. Let's face it, companies cannot remain unprofitable for very long before a change has to be made. This could mean further restructuring or corporate event such as selling assets or spinning off divisions, at any rate a company with negative cash flows is not one that often makes a great investment unless you can acquire it at an extremely depressed price.

DVN Dividends

When determining a company's future prospects for success, Ockham Research sees analysis of dividend payments as a key additional factor. Even though it isn't imperative for DVN to shell out a dividend in order to receive a positive rating, it can be helpful to further our analysis.

The estimated annual dividend for DVN is $0.64 producing a current dividend yield of 0.96%. Much like our evaluation of Sales and Cash Earnings per share, we review dividend yields from DVN against the historic high and low levels over all available dividend history. Because dividends are a decision made exclusively by management, we view a healthy and rising dividend as a sign of confidence and strength. The highest dividend yield from DVN over previous years was 1.66% while the lowest dividend yield was 0.30%. The current dividend yield is below the historical median, which is slightly off-putting. We are a bit adverse to DVN from this valuation metric.

Peer Comparison

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Devon Energy Corp. Industry Grouping

(2/8/2010)
Company Ticker Market Cap (Ml) Latest
Price
Price/Cash Earnings Price/Sales 5-Yr. Rev.
Growth Rate
5-Yr.
Avg. ROE.
Current 10-Yr. Range* Current 10-Yr. Range*
Peer Company Averages (not including DVN) 7.34 2.98 » 14.79 2.20 0.82 » 7.39 26.76% 23.34%
*10 year range does not include current year values
Anadarko Petroleum Corp. APC $30.6 Billion $62.33 8.04 1.74 » 17.53 3.77 0.71 » 3.84 25.15% 22.64%
Imperial Oil Limited IMO $29.9 Billion $35.22 14.08 5.37 » 16.98 1.66 0.69 » 18.85 11.66% 39.16%
Devon Energy Corp. DVN $29.4 Billion $66.14 -1.00 2.80 » 41.64 3.32 1.05 » 3.72 15.65% 13.65%
Transocean Ltd. RIG $26.8 Billion $83.40 5.96 2.70 » 21.20 2.23 1.03 » 7.97 39.09% 16.34%
Repsol YPF SA REP $26.7 Billion $21.90 3.24 2.10 » 6.66 0.32 0.23 » 0.73 12.62% 16.36%
XTO Energy, Inc. XTO $26.1 Billion $44.97 5.38 2.97 » 11.57 3.01 1.44 » 5.55 45.27% 22.18%
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4:06P, Dec. 22,2009 DVN $71.09 Devon Energy Corp.
Closing Bell

RazorWire has Detected News About DVN on Closing Bell

Staying informed on the news is invaluable for investors, and RazorWire has captured a recently discussion on DVN from Closing Bell.

The Motley Fool CAPS data suggests that investors believe Devon Energy Corporation will beat the market in the foreseeable future. As we analyze the results from RazorWire, one thing we do is rank each stock in terms of amount of news coverage. Recently, DVN has been less covered in the news compared to the rest of our universe of stocks. At Ockham, we are not advising buying Devon Energy Corporation at the current price level because according to our methodology it is not supported by the fundamentals.

“… Doubled. Navistar up tonight 8.5%. DEVON ENERGY. Devon will use the proceeds to …”

4:02P, Dec. 14,2009 DVN $66.79 Devon Energy Corp.
Closing Bell

Holding DVN Stock? See What Is Being Discussed on Closing Bell

The latest news from business television and influential blogs is always available through Ockham's RazorWire, and this news is in relation to Devon Energy Corporation.

As we analyze the results from RazorWire, one thing we do is rank each stock in terms of amount of news coverage. Recently, DVN has been less covered in the news compared to the rest of our universe of stocks. At Ockham, we are not advising buying Devon Energy Corporation at the current price level because according to our methodology it is not supported by the fundamentals. The Motley Fool CAPS data suggests that investors believe Devon Energy Corporation will beat the market in the foreseeable future.

“… DEVON ENERGY, chesapeake energy, anadarko -- all of them on the any company that has access to shale fields is one that's being looked at very carefully. …”

8:42A, Dec. 14,2009 DVN $66.67 Devon Energy Corp.
Squawk Box

News Developing on Squawk Box for DVN

Devon Energy Corporation is one of the thousands of companies that Ockham has news analytics on, and it was recently discussed on Squawk Box.

At the current price, value investors will want to look elsewhere for a buying opportunity as this stock has heated up and is currently Overvalued. Crowd sentiment is leaning to the bearish side, according to the robust data set collected by the Motley Fool CAPS survey. Ranking all stocks in terms of news coverage offers some interesting data. In the case of DVN, it is getting significantly more attention in recent news coverage than we are used to seeing.

“… shares of DEVON ENERGY are up by 4. 5% on this news. What are other names of potential takeover targets? > > devon, chesapeake energy, one of my favorite companies out there, ... …”

3:55P, Nov. 20,2009 DVN $67.47 Devon Energy Corp.
Closing Bell

Interested in DVN? See What the Pundits Said on Closing Bell

The latest news from business television and influential blogs is always available through Ockham's RazorWire, and this news is in relation to Devon Energy Corporation.

In comparison to the other stocks that we follow, Devon Energy Corporation has seen more discussion in relation to its normal ranking among the group. So, be aware that the news sources we track are focusing on this stock more recently. We have recently (Saturday, November 07, 2009) downgraded this stock due to deteriorating fundamentals. As of this week's report, we have an Overvalued valuation on DVN because the price has gotten too high to be justified by the fundamentals. Be aware that crowd sentiment is favorable on this stock, as measured by the Motley Fool CAPS survey.

“… Archco, peabody energy, DEVON ENERGY all down for the day. Relatively light trading. Coal. Like at snapple. A little late afternoon joke for you today. …”

6:30P, Nov. 18,2009 DVN $71.72 Devon Energy Corp.
Mad Money

Talk of DVN's CEO Nichols on Mad Money

Ockham is always interested to know what the Chief Executive is doing for their company, and we noticed a mention of DVN's CEO on Mad Money.

At the current price, value investors will want to look elsewhere for a buying opportunity as this stock has heated up and is currently Overvalued. Ranking all stocks in terms of news coverage offers some interesting data. In the case of DVN, it is getting significantly more attention in recent news coverage than we are used to seeing. Due to deterioration in our valuation, we downgraded DVN as of Saturday, November 07, 2009. Crowd sentiment is leaning to the bearish side, according to the robust data set collected by the Motley Fool CAPS survey.

“… When we took the back to school bus to the university of oklahoma, we had a chance to speak to larry nichols, the ceo of DEVON ENERGY, dvn. The stock is up 11% from the $64. …”

6:26P, Nov. 18,2009 DVN $71.94 Devon Energy Corp.
Mad Money

A Discussion of DVN's CEO Occurred on Mad Money

Staying in touch with the latest management news is one way we are keeping our clients informed. Notice, RazorWire has a news capture related to DVN's CEO.

From a sentiment perspective, the Motley Fool CAPS data suggests that investors believe Devon Energy Corporation will beat the market in the foreseeable future. Our valuation of DVN has become less favorable recently, and we have seen it necessary to downgrade the stock. When looking at our entire coverage universe and ranking stocks by the attention they receive on RazorWire, it is clear that Devon Energy Corporation has been talked about more than normal recently. At Ockham, we are not advising buying Devon Energy Corporation at the current price level because according to our methodology it is not supported by the fundamentals.

“… coming up, with news it's source with DEVON ENERGY ceo larry nichols. > > > plus, try to keep up with cramer as he takes your calls lightning round. > > > …”

6:12P, Nov. 18,2009 DVN $71.85 Devon Energy Corp.
Mad Money

Did You See DVN's CEO Nichols on Mad Money?

Ockham is always interested to know what the Chief Executive is doing for their company, and we noticed a mention of DVN's CEO on Mad Money.

From a sentiment perspective, the Motley Fool CAPS data suggests that investors believe Devon Energy Corporation will beat the market in the foreseeable future. When looking at our entire coverage universe and ranking stocks by the attention they receive on RazorWire, it is clear that Devon Energy Corporation has been talked about more than normal recently. At Ockham, we are not advising buying Devon Energy Corporation at the current price level because according to our methodology it is not supported by the fundamentals. Our valuation of DVN has become less favorable recently, and we have seen it necessary to downgrade the stock.

“… plus, with news that's planning to reposition itself, cramer is going straight to the source with DEVON ENERGY ceo, larly nichols. On the executive decision. > > > …”

11:46A, Nov. 18,2009 DVN $70.94 Devon Energy Corp.
Fox Business

Interested in DVN? See What the Pundits Said on Fox Business

The latest news on Fox Business in regards to DVN came through on RazorWire recently.

At the current price, value investors will want to look elsewhere for a buying opportunity as this stock has heated up and is currently Overvalued. Crowd sentiment is leaning to the bearish side, according to the robust data set collected by the Motley Fool CAPS survey. Ranking all stocks in terms of news coverage offers some interesting data. In the case of DVN, it is getting significantly more attention in recent news coverage than we are used to seeing. Due to deterioration in our valuation, we downgraded DVN as of Saturday, November 07, 2009.

“… brian: boone pickens hedge fund filings and look at the top holdings, betting big on natural gas companies like DEVON ENERGY and others, is he right? > > …”

1:53P, Nov. 16,2009 DVN $71.41 Devon Energy Corp.
Power Lunch

Power Lunch Mentioned Sentiment on Devon Energy Corporation Recently

Sentiment and investors' opinions on DVN were covered on Power Lunch recently and RazorWire has captured the news segment.

When taking into account the amount of news coverage each stock normally sees as a percentage of the total, Devon Energy Corporation has actually sunk a bit in comparison to the others. As of this week's report, we have an Overvalued valuation on DVN because the price has gotten too high to be justified by the fundamentals. We have recently (Saturday, November 07, 2009) downgraded this stock due to deteriorating fundamentals. Crowd sentiment is favorable on this stock, as measured by the Motley Fool CAPS survey. Take notice of the news on this stock because it is up $3.85 since the close of trading yesterday.

“… Energy, DEVON ENERGY up 5%. Materials not too shabby. Cliff's natural resources up 6%. 73% to the upside the last three the new high $44. 26. Slightly below it now. …”

9:45A, Nov. 16,2009 DVN $71.27 Devon Energy Corp.
Squawk On The Street

Stay Current on DVN's News on Squawk On The Street

The latest news from Squawk On The Street on DVN is available through Ockham's news analytics platform RazorWire.

As we analyze the results from RazorWire, one thing we do is rank each stock in terms of amount of news coverage. Recently, DVN has been less covered in the news compared to the rest of our universe of stocks. At Ockham, we are not advising buying Devon Energy Corporation at the current price level because according to our methodology it is not supported by the fundamentals. Our valuation of DVN has become less favorable recently, and we have seen it necessary to downgrade the stock. The Motley Fool CAPS data suggests that investors believe Devon Energy Corporation will beat the market in the foreseeable future. Check the news on this stock because there is a catalyst that has allowed this stock to advance 5.15% today.

“… DEVON ENERGY is a high growth north american onshore company. They're selling all the gulf of mexico and international assets. …”

View All Devon Energy Corp. Stock News

Key Fundamentals

DVN - Devon Energy Corporation Fundamentals
Price (2/9 2:58PM) $67.32
Volume (2/9 2:58PM) 3.1 Million
Last Close Price $66.14
10 Day Average Volume 3.8 Million
13 Week Price Range $62.66 - $76.79
52 Week Price Range $38.55 - $76.79
LTM Revenue $8.9 Billion
 
Shares Outstanding (12/2008) 444.1 Million
Market Capitalization $29.4 Billion
Shares Held By Institutions 360.3 Million
Institutional Holders 1,079
% Shares Held By Institutions 81.20%
Earnings Per Share (EPS) ($4.85)
P/E Ratio n/a
Book Value Per Share $32.99
 
Gross Margin 63.50%
Annual Dividend 0.64
Dividend Yield 1.00%
Beta 1.21
Fiscal Year Ends December

About Devon Energy Corp.

Devon Energy Corporation is considered to operate in the Basic Materials sector. They specifically operate in the Independent Oil & Gas business segment contained within the Energy industry.

An independent energy company, which is engaged in oil and gas exploration, development and production, the transportation of oil, gas, and NGLs and the processing of natural gas.