DEVON ENERGY NYSE-DVN RECENT
PRICE 38.96 P/ERATIO 8.2(Trailing:
Median: 19.0) P/E RATIO 0.43 YLD 2.3%
7.7 RELATIVE DIV’D VALUE
LINE
TIMELINESS 3 Lowered 11/22/24 High:
Low:
66.9
50.8
80.6
51.8
70.5
28.0
50.7
18.1
49.4
28.8
46.5
20.4
35.4
19.7
27.0
4.7
45.6
15.7
79.4
42.9
67.0
42.6
55.1
37.8
Target Price Range
2027 2028 2029
SAFETY 3 Raised 11/22/24 LEGENDS
7.0 x ″Cash Flow″ p sh E
TECHNICAL 3 Raised 11/8/24 . . . . Relative Price Strength
Options: Yes
200
160
BETA 1.45 (1.00 = Market) Shaded area indicates recession
18-Month Target Price Range 100
Low-High Midpoint (% to Mid) 80
$32-$58 $45 (15%) 60
50
2027-29 PROJECTIONS 40
Ann’l Total 30
Price Gain Return
High 95 (+145%) 26% 20
Low 60 (+55%) 13%
% TOT. RETURN 10/24
Institutional Decisions THIS VL ARITH.*
4Q2023 1Q2024 2Q2024 STOCK INDEX
Percent 60 1 yr. -14.7 28.7
to Buy 574 597 603 shares 40
to Sell 630 574 521 3 yr. 14.0 10.7
traded 20
Hld’s(000) 446183 455798 462887 5 yr. 145.3 73.6
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 © VALUE LINE PUB. LLC 27-29
34.28 20.06 22.27 28.34 23.40 25.61 47.84 31.45 23.32 26.57 23.91 16.28 12.64 18.41 29.36 24.00 24.40 27.15 Sales per sh 35.20
17.74 8.98 10.02 11.71 10.09 11.15 13.04 9.98 3.35 5.54 5.17 5.45 3.32 6.84 11.79 9.77 9.60 10.15 ‘‘Cash Flow’’ per sh 13.65
9.68 3.79 5.75 5.94 3.26 4.29 4.91 2.52 d.13 1.59 1.28 1.41 d.09 3.52 8.31 5.70 4.80 4.95 Earnings per sh A 7.10
.64 .64 .64 .67 .80 .86 .94 .96 .42 .24 .30 .35 .42 .44 .70 .80 .88 .96 Div’ds Decl’d per sh B 1.12
21.13 10.92 14.51 18.64 20.26 16.65 17.09 12.70 4.46 5.26 5.46 5.08 3.02 3.00 3.89 6.11 6.35 6.65 Cap’l Spending per sh 7.45
38.45 34.86 43.14 53.03 52.41 50.49 52.66 16.86 11.33 17.63 20.46 15.19 7.55 13.97 17.10 18.97 22.15 29.10 Book Value per sh C 54.05
443.70 446.70 446.30 404.10 406.00 406.00 409.00 418.00 523.00 525.00 449.00 382.00 382.00 663.00 653.00 635.70 645.00 615.00 Common Shs Outst’g D 550.00
9.8 15.9 11.7 12.8 18.9 13.5 13.7 21.0 -- 23.8 28.9 18.7 -- 8.2 7.5 9.0 Bold figures are Avg Ann’l P/E Ratio 11.0
.59 1.06 .74 .80 1.20 .76 .72 1.06 -- 1.20 1.56 1.00 -- .44 .43 .50 Value Line Relative P/E Ratio .60
estimates
.7% 1.1% 1.0% .9% 1.3% 1.5% 1.4% 1.8% 1.2% .6% .8% 1.3% 3.2% 1.5% 1.1% 1.6% Avg Ann’l Div’d Yield 1.4%
CAPITAL STRUCTURE as of 9/30/24 19566 13145 12197 13949 10734 6220.0 4828.0 12206 19169 15258 15740 16710 Sales ($mill) 18800
Total Debt $8,884 bill. Due in 5 Yrs $1756 mill. 48.9% 25.7% 34.5% 22.5% 30.9% 27.0% 24.6% 44.5% 53.0% 49.1% 44.5% 46.0% Operating Margin 48.0%
LT Debt $8,884 bill. LT Interest $478 mill. 3319.0 3129.0 1792.0 2074.0 1658.0 1497.0 1300.0 2158.0 2223.0 2554.0 3100 3200 Depreciation ($mill) 3600
(Total interest coverage: 16.0x) (39% of Cap’l)
2014.0 1044.0 d38.0 835.0 662.0 583.0 d30.0 2374.0 5476.0 3659.0 3100 3040 Net Profit ($mill) 3900
Leases, Uncapitalized Annual rentals $13.0 mill. 53.0% 29.9% -- -- 16.0% -- -- 17.4% 24.0% 20.1% 21.0% 21.0% Income Tax Rate 21.0%
Pension Assets-12/23 $476 mill. 10.3% 7.9% NMF 6.0% 6.2% 9.4% NMF 19.4% 28.6% 24.0% 19.7% 18.2% Net Profit Margin 20.7%
Oblig. $662 mill. 563.0 731.0 1156.0 1476.0 2211.0 1924.0 1820.0 1162.0 786.0 208.0 d420 390 Working Cap’l ($mill) 1040
Pfd Stock None 9830.0 12137 10154 10291 5785.0 4294.0 4298.0 6482.0 6189.0 5672.0 8770 8650 Long-Term Debt ($mill) 7000
Common Stock 656,900,000 shares.
as of 10/23/24 21539 7049.0 5927.0 9254.0 9186.0 5802.0 2885.0 9262.0 11167 12061 14300 17900 Shr. Equity ($mill) C 29740
7.3% 6.8% 1.3% 5.5% 6.4% 7.0% 1.5% 16.1% 32.4% 21.5% 14.5% 12.0% Return on Total Cap’l 11.0%
MARKET CAP: $25.6 billion (Large Cap) 9.4% 14.8% NMF 9.0% 7.2% 10.0% NMF 25.6% 49.0% 30.3% 21.5% 17.0% Return on Shr. Equity 13.0%
CURRENT POSITION 2022 2023 9/30/24 7.6% 9.2% NMF 7.7% 5.6% 7.6% NMF 22.4% 45.0% 26.1% 17.5% 13.5% Retained to Com Eq 11.0%
($MILL.) 19% 38% NMF 15% 23% 24% NMF 13% 8% 14% 18% 19% All Div’ds to Net Prof 16%
Cash Assets 1454 875 676
Receivables 1767 1573 1779 BUSINESS: Devon Energy Corp. is a North American oil, NGL, and MMbls liquids and 3,182 bcf natural gas. Has about 1,900 emplys.
Inventory (Avg Cst) 201 249 293 gas exploration and production company. It completed an all-stock Off./Dir. own less than 1.0% of common; The Vanguard Group,
Other 469 460 484
merger with WPX Energy in January 2021; sold operations in Cana- 11.7%; BlackRock, Inc., 8.2% (4/24 proxy). Chrmn.: Barbara
Current Assets 3891 3157 3232
da, 6/19; sold Barnett Shale assets, 10/20. 2023 production: 240 Baumann. CEO: Rick Muncrief. Incorporated: OK. Address: 333
Accts Payable 859 760 995
Debt Due 251 483 -- MMboe, including 385 Bcf gas and 176 Mbbls liquids. Proved West Sheridan Avenue, Oklahoma City, OK 73102. Telephone:
Other 1995 1706 1911 reserves at 12/31/23: 1,817 mill. Bbls. of oil equiv., including 1,286 405-235-3611. Internet: [Link].
Current Liab. 3105 2949 2906
Devon is about to accelerate prod- to improve its financial health. Moreover,
ANNUAL RATES Past Past Est’d ’21-’23 uction growth. The energy supplier a decision to forego the variable part of the
of change (per sh) 10 Yrs. 5 Yrs. to ’27-’29 notched a 3% sequential volume increase, company’s dividend policy ought to help
Sales -.5% -.5% 6.5%
‘‘Cash Flow’’ -1.5% 15.0% 6.5% to 728,000 barrels of oil equivalent (boe), meet a debt reduction target of $2.5 bil-
Earnings 2.5% 45.0% 3.5% including 335,000 barrels of oil, in the sec- lion. In the meantime, Devon is optimistic
Dividends -2.0% 15.0% 9.5% ond quarter. Results benefited from the that a budget of $4.0 billion and $4.2 bil-
Book Value -10.5% .5% 21.5%
late September close of the $5.0 billion lion in 2024 will generate robust levels of
Cal- QUARTERLY SALES ($ mill.) Full Grayson Mill Energy acquisition, which free cash flows. Until further notice,
endar Mar.31 Jun.30 Sep.30 Dec.31 Year added 5,000 boe in the period. The deal Devon intends to return 70% of free cash
2021 2050 2417 3466 4273 12206 was funded through the issuance of 37.3 flow to investors through fixed dividends
2022 3812 5626 5432 4299 19169 million shares, as well as $5.0 billion and share repurchases (which is likely to
2023 3823 3454 3836 4145 15258 through a combination of senior notes, a be in the vicinity of $200 million-$300 mil-
2024 3596 3917 4024 4203 15740 term loan, and cash on hand. While all of lion each quarter).
2025 4100 4080 4180 4350 16710 the company’s assets contributed to the Devon shares are favorably ranked
Cal- EARNINGS PER SHARE A Full performance, holdings across the Delaware for year-ahead relative price perform-
endar Mar.31 Jun.30 Sep.30 Dec.31 Year Basin (488,000 boe in the September inter- ance. And the issue holds solid appreci-
2021 .45 .60 1.08 1.39 3.52 im) accounted for a lion’s share of the out- ation potential over the 3- to 5-year period
2022 1.88 2.59 2.18 1.66 8.31 put. Devon’s legacy assets, together with compared to a Value Line median of 35%.
2023 1.45 1.18 1.65 1.41 5.70 the Grayson transaction, are building mo- The Grayson acquisition enhances scale
2024 1.16 1.41 1.10 1.13 4.80 mentum. In fact, production is likely to and return on investments across holdings
2025 1.15 1.40 1.20 1.20 4.95
rise to 811,000-830,000 boe in the fourth in the Williston Basin. It also adds 500 un-
Cal- QUARTERLY DIVIDENDS PAID B Full quarter, and the metric should exceed drilled locations, bringing inventory in the
endar Mar.31 Jun.30 Sep.30 Dec.31 Year 800,000 boe next year, as well. resource to approximately 10 years.
2020 .09 .11 .11 .11 .42 The outlook for oil and gas remains Altogether, Devon’s reservoir of wells is
2021 .11 .11 .11 .11 .44 supportive, leading Devon to continue impressive. That said, these shares hold
2022 .16 .18 .18 .18 .70 seeking ways to grow its portfolio. In ample risk (Stock Price Stability: 15 and
2023 .20 .20 .20 .20 .80
2024 .22 .22 .22 order to be in position to make additional Earnings Predictability: 30).
acquisitions, the company will likely have Dominic B. Silva November 22, 2024
(A) Diluted earnings. Excludes nonrecurring ’24, 1Q: (22¢). Next earnings report due mid- cludes variable dividends: ’21: $1.53; ’22: Company’s Financial Strength B++
gains/(losses): ’18, (11¢); ’19, ($1.62); ’20, February. (B) Dividends historically paid at the $4.47; ’23: $2.07; ’24: 1Q, 22¢. (C) Includes in- Stock’s Price Stability 15
($6.69). Excl. disc. operations: ’18, $4.97; ’19, end of March, June, September, and Decem- tangibles: ’23: $753 million, $1.18/share. (D) In Price Growth Persistence 30
(68¢); ’20, 34¢; ’21, 67¢; ’22, 81¢; ’23, 14¢; ber. Paid 26¢ special dividend in 10/20. Ex- millions. (E) Divested EnLink. Earnings Predictability 30
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