Latest news with #DVN
Globe and Mail
16-05-2025
- Business
- Globe and Mail
Devon Outperforms Industry Year to Date: How to Play the Stock?
's DVN shares have gained 1.6% in the year-to-date period, outperforming the Zacks Oil & Gas- Exploration and Production- United States industry's decline of 22.8% and the broader Zacks Oil and Energy sector's decline of 1.3%. While the year-to-date performance paints a positive picture for investors, looking at the past one-year performance is crucial for a fuller understanding. DVN's stock has declined 32.7% in the past year, suggesting that it is on a gradual path to recovery. Another stock from the same sector, Occidental Petroleum Corporation OXY, registered a decline of 31.7% in share price over the past year. Price Performance (Year to Date) Should you consider adding DVN stock to your portfolio only based on positive price movements? Let's delve deeper and find out the factors that can help investors decide whether it is a good entry point to add the stock to their portfolio. Factors Contributing Toward DVN's Stable Performance Devon Energy also benefits from a well-balanced commodity mix, with exposure to oil, natural gas, and natural gas liquids. The company remains focused on expanding its portfolio with high-quality resources. In 2024, exploration efforts led to a production replacement rate of 154%, ensuring the company can sustain production levels well into the future through strong reserve additions. DVN possesses a diversified, multi-basin portfolio of high-margin oil and gas assets with strong long-term growth potential. The company continues to enhance its asset base through strategic acquisitions. Through the acquisition of Grayson Mill Energy's Williston Basin assets, DVN expanded net acreage in the region from 123,000 to 430,000 acres. This acquisition is expected to triple production from 50,000 to 150,000 barrels of oil equivalent per day (Boe/d). These newly acquired assets have already begun contributing to the company's output and are expected to support long-term growth. Devon Energy's low-cost operating model further supports its profitability. By divesting higher-cost assets and bringing online more efficient, lower-cost production, the company is improving its cost structure. Ongoing efforts to reduce drilling and completion expenses, along with streamlining its workforce to align with its strategic goals, continue to strengthen Devon Energy's margins. Devon Energy's Earnings Surprise DVN has been reporting strong earnings results, courtesy of solid financial and operational performance from its multi-basin assets. Yet, the company missed expectations in the last reported quarter. It surpassed expectations in the other three of the last four quarters, with an average earnings surprise of 6.09%. Occidental Petroleum reported positive earnings surprise in each of the last four quarters, resulting in an average positive surprise of 24.34%. DVN Stock Returns Better Than Industry Devon Energy's return on invested capital (ROIC) has outperformed the industry average in the trailing 12 months. ROIC of DVN was 8.71% compared with the industry average of 7.33%. The ROIC measures how well a company generates returns on the money it invests. ROIC is a key indicator of a company's profitability and operational efficiency. The ROIC of the company indicates that it is investing money more efficiently than its peers in the industry. Another company, Cheniere Energy LNG, operating in the same industry, has an ROIC of 9.26%, which is better than the industry and Devon. Devon's Earnings Estimates Decline The Zacks Consensus Estimate for DVN's 2025 and 2026 earnings per share has declined 15.23% and 18.2%, respectively, in the past 60 days. Cheniere Energy's 2025 earnings estimate reflected a decline of 4.74%, while 2026 estimates reflected an increase of 1.36% in the past 60 days. DVN Shares are Trading at a Discount Devon Energy's shares are inexpensive on a relative basis, with its current trailing 12-month Enterprise Value/Earnings before Interest Tax Depreciation and Amortization (EV/EBITDA TTM) being 3.61X compared with its industry average of 9.39X. Summing Up Devon Energy benefits from the contributions from its multi-basin assets, and has a balanced exposure to oil, natural gas and NGL production, adding to its advantage. DVN's return is better than the industry, and its current inexpensive valuation makes it attractive. However, the decline in earnings estimates offsets most of the positive traits at this moment. Those who already own this Zacks Rank #3 (Hold) stock would do well to retain it in their portfolio, while new investors should wait a little longer for a better entry point. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Zacks Names #1 Semiconductor Stock It's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom. With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028. See This Stock Now for Free >> Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Devon Energy Corporation (DVN): Free Stock Analysis Report Cheniere Energy, Inc. (LNG): Free Stock Analysis Report
Yahoo
13-05-2025
- Business
- Yahoo
Compared to Estimates, Devon Energy (DVN) Q1 Earnings: A Look at Key Metrics
For the quarter ended March 2025, Devon Energy (DVN) reported revenue of $4.45 billion, up 23.8% over the same period last year. EPS came in at $1.21, compared to $1.16 in the year-ago quarter. The reported revenue compares to the Zacks Consensus Estimate of $4.36 billion, representing a surprise of +2.05%. The company delivered an EPS surprise of -4.72%, with the consensus EPS estimate being $1.27. While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to determine their next move, some key metrics always offer a more accurate picture of a company's financial health. Since these metrics play a crucial role in driving the top- and bottom-line numbers, comparing them with the year-ago numbers and what analysts estimated about them helps investors better project a stock's price performance. Here is how Devon Energy performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts: Production - Total oil equivalent per day: 815 millions of barrels of oil equivalent versus 817.2 millions of barrels of oil equivalent estimated by six analysts on average. Average Daily Production - Total Oil: 388 millions of barrels of oil compared to the 383.85 millions of barrels of oil average estimate based on five analysts. Average Daily Production - Total Gas: 1346 millions of cubic feet versus 1329.95 millions of cubic feet estimated by five analysts on average. Average Daily Production - Total NGL: 203 millions of barrels of oil versus the five-analyst average estimate of 211.1 millions of barrels of oil. Production - Oil - Other: 4 millions of barrels of oil per day compared to the 3.91 millions of barrels of oil per day average estimate based on four analysts. Production - NGL - Delaware Basin: 118 millions of barrels of oil per day versus 121.75 millions of barrels of oil per day estimated by four analysts on average. Revenues- Marketing and midstream revenues: $1.42 billion compared to the $1.27 billion average estimate based on four analysts. The reported number represents a change of +28.1% year over year. Revenues- Gas: $309 million compared to the $257.62 million average estimate based on three analysts. Revenues- Oil, gas and NGL sales: $3.13 billion versus the three-analyst average estimate of $3.10 billion. The reported number represents a year-over-year change of +18.9%. Revenues- Oil: $2.41 billion versus the three-analyst average estimate of $2.43 billion. Revenues- NGL: $403 million versus $407.79 million estimated by three analysts on average. Revenues- Oil, gas and NGL derivatives: -$98 million versus the two-analyst average estimate of $17.88 million. The reported number represents a year-over-year change of -32.4%. View all Key Company Metrics for Devon Energy here>>>Shares of Devon Energy have returned +15.2% over the past month versus the Zacks S&P 500 composite's +3.8% change. The stock currently has a Zacks Rank #3 (Hold), indicating that it could perform in line with the broader market in the near term. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Devon Energy Corporation (DVN) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
Yahoo
05-05-2025
- Business
- Yahoo
Devon Energy Corporation (DVN): Among the Most Undervalued Energy Stocks to Buy According to Hedge Funds
We recently published a list of the 10 Most Undervalued Energy Stocks to Buy According to Hedge Funds. In this article, we are going to take a look at where Devon Energy Corporation (NYSE:DVN) stands against other undervalued energy stocks. As of the close of May 2, 2025, the overall energy sector is undervalued by 13.1%, as compared to the general market's undervaluation of 5.3%. The current downturn in the energy sector is primarily attributed to the current trade war sparked by President Trump's tariffs and its resultant forecasted global economic slowdown. Moreover, global crude oil prices have plunged heavily since last month, with the West Texas Intermediate (WTI) crude price currently hovering around the $56 mark – a level it last hit during the Covid-19 pandemic in 2021. READ ALSO: Top 15 Energy Companies With the Highest Upside Potential Crude oil took a fresh hit this weekend after OPEC+ stunned the market by announcing a larger-than-expected output increase for June. This follows a similar surge announced for May and signals a sharp reversal from the group's efforts to defend crude prices. It seems like Saudi Arabia has adopted a low-price strategy, aiming to discipline overproducing members like Kazakhstan and Iraq. This could also be a part of Riyadh's efforts to build good relations with Donald Trump, who has recently been calling on the Kingdom to increase production in order to bring prices down. Given the high volatility in the market, it comes as no surprise that short-sellers marginally increased their bets against oil and gas stocks in March, with short interest in the energy sector reaching 2.58% compared to 2.52% in February. That said, while oil may be presenting a bleak outlook, there are other sectors within the energy business that look very promising right now. A significant growth driver for the global energy industry is the ongoing AI boom and its accompanying power-hungry data centers. According to the International Energy Agency, the global electricity demand from data centers is set to more than double by 2030 to around 945 terawatt-hours (TWh), slightly more than the entire electricity consumption of Japan today. The rise of AI is also reshaping US power markets, as according to BNEF, the country's data center demand is projected to rise from 3.5% of total electricity demand today to 8.6% by 2035. Big Tech seems to have jumped headfirst into the AI boom, with commitments to invest hundreds of billions of dollars to build data centers and ensure their energy supply. In fact, this strategic move has injected new life into sectors such as nuclear, which has regained the spotlight after several tech giants met on the sidelines of the CERAWeek conference in March and signed a pledge to support the goal of at least tripling the world's nuclear energy capacity by 2050. That said, there have been concerns lately that the power demand required by the ballooning data center industry may have been overestimated, which led to several energy stocks posting significant declines not so long ago. However, the recently reported better-than-expected results from the cloud and AI businesses of some American tech giants suggest that these fears may have been overblown. Commercial real estate executives have stated that while there has been a 'pause' in some data center capex, it is likely to be temporary, with hundreds of billions of dollars still to be spent. A group of technicians in hazmat suits inspecting a natural gas storage tank. To collect data for this article, we looked for companies operating in the energy sector with forward P/E ratios of below 15 as of the close of May 2, 2025. Then, we identified companies that have delivered substantial returns over the last five years, in order to steer clear of potential value traps. In the end, we selected companies with the highest number of hedge fund holders in the Insider Monkey database, as of Q4 2024. The following are the Most Undervalued Energy Stocks According to Hedge Funds. At Insider Monkey, we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here). No. of Hedge Fund Holders: 55 Forward P/E Ratio as of May 2: 7.93 Devon Energy Corporation (NYSE:DVN) is a leading independent energy company engaged in finding and producing oil and natural gas, with operations focused onshore in the United States. Devon Energy Corporation (NYSE:DVN) had a strong Q4 2024 as its adjusted EPS of $1.16 topped expectations of $1. The company's revenue also increased by 6.22% YoY to $4.4 billion, beating estimates by around $155.3 million. Devon's oil production reached an all-time high of 398,000 bpd during the quarter, while its overall production came in at 848,000 boe/d. Such a strong performance was aided by the contribution from the Williston Basin business, which Devon acquired from Grayson Mill Energy in a $5 billion deal last year. Devon Energy Corporation (NYSE:DVN) has invested heavily to grow its scale across several key U.S. oil and gas production basins to reduce costs and enhance its ability to produce free cash flow. As a result, the company reported $3 billion in free cash flow last year, with the goal to generate an additional $1 billion by the end of 2026. The oil and gas producer aims to achieve this by reducing drilling and completion costs and improving operating margins. DVN also returned $2 billion to its shareholders in 2024 and is now targeting up to a 70% cash return payout at current strip pricing. Overall, DVN ranks 8th on our list of the most undervalued energy stocks to buy according to hedge funds. While we acknowledge the potential of DVN as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than DVN but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock. READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires. Disclosure: None. This article is originally published at . Sign in to access your portfolio
Yahoo
29-04-2025
- Business
- Yahoo
Devon Energy Corporation (DVN): One of the Top Energy Companies with the Highest Upside Potential
We recently published a list of the Top 15 Energy Companies with the Highest Upside Potential. In this article, we are going to take a look at where Devon Energy Corporation (NYSE:DVN) stands against other top energy companies. After posting notable gains in the first three months of 2025, the energy sector witnessed significant declines in April, primarily due to the ongoing global trade war sparked by President Trump's tariffs and the prospects of an economic slowdown. The overall energy sector has now slid by around 3.8% since the beginning of the year, against a decline of about 5.8% by the wider market. Unsurprisingly, the downturn is led by the oil and gas sector, which has fallen by over 15% YTD. READ ALSO: 11 Best Solar Energy Stocks to Buy According to Hedge Funds The primary reason behind this fall is the declining global price of crude oil, caused by the continued uncertainty surrounding global trade, demand fears, and the recent decision by OPEC+ to increase supply. The West Texas Intermediate crude price is currently hovering at a multi-year low level of just under $62, down by over 25% YoY. To make matters worse, the International Energy Agency recently cut its 2025 oil demand growth forecast by 300,000 barrels per day compared to last month, warning the world to 'buckle up' amid the escalating trade tensions. That said, there are sectors in the energy industry that are still significantly bullish, with liquified natural gas being a prime example. The United States of America is already the largest LNG exporter in the world, with exports growing consistently over the last decade. Still, the industry continues to boom after it received significant support from the Trump administration, which has made boosting America's fossil fuel sector its primary agenda. According to Wood Mackenzie, 15.5 million tons per annum (MTPA) of long-term LNG offtake contracts were signed in the first quarter of 2025, following a record 81 MTPA last year. These numbers are expected to spike in the coming months after more and more countries are looking to export American LNG to narrow their trade gap with the US, following a tariff threat by the White House. Another important growth driver for the energy sector is the ongoing AI boom and its accompanying power-hungry data centers. According to a study by the American Clean Power Association, electricity demand in the US is expected to surge by 35-50% by 2040, driven by domestic manufacturing growth, data centers, and mass electrification. A primary candidate to satisfy this huge demand is natural gas, which is clean, reliable, and abundant. According to energy data provider Enverus, a total of 80 new gas power plants could be constructed in America by the end of the decade. That said, natural gas is not as cheap as it was a year ago, as prices have surged by around 36.6% over the last 52 weeks. Another important candidate is nuclear energy, which has emerged as a hot topic these days, especially after several tech giants met on the sidelines of the CERAWeek conference in Houston and signed a pledge to support the goal of at least tripling the world's nuclear energy capacity by 2050. A number of these companies have already signed contracts with nuclear energy providers to power their data centers, with Jeff Bezos' online retail giant being a primary example. A group of technicians in hazmat suits inspecting a natural gas storage tank. To collect data for this article, we examined companies operating in the energy sector and then compiled a list of the stocks with the highest upside potential according to Wall Street analysts, as of April 28, 2025. To keep our list relevant, we have only included companies with a market cap of $10 billion and above. The following are the Energy Companies with the Highest Upside Potential. At Insider Monkey, we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here). Upside Potential as of April 28: 37.45% Devon Energy Corporation (NYSE:DVN) is a leading independent energy company engaged in finding and producing oil and natural gas, with operations focused onshore in the United States. Devon Energy Corporation (NYSE:DVN) topped forecasts in Q4 2024 as its adjusted EPS of $1.16 was above expectations of $1. The company's revenue also increased by 6.22% YoY to reach $4.4 billion, beating estimates by $155.3 million. The strong performance was primarily a result of Devon's production jumping 28% YoY to 848,000 boe/d during the quarter, aided by the contribution from the Williston Basin business, which the oil and gas company acquired from Grayson Mill Energy in a $5 billion deal. Despite the acquisition, Devon Energy Corporation (NYSE:DVN) maintains a strong balance sheet, generating $3 billion in free cash flow in 2024. The company returned $2 billion of it to its shareholders and recently raised its quarterly dividend by 9.1% to $0.24 per share. For 2025, DVN is targeting up to a 70% cash return payout to shareholders from generated free cash flow at current strip pricing. With a current dividend yield of almost 4%, Devon Energy Corporation (NYSE:DVN) is placed among the 12 Best Oil and Gas Dividend Stocks According to Billionaires. Overall, DVN ranks 10th on our list of the top energy companies with the highest upside potential. While we acknowledge the potential of DVN as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than DVN but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock. READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires. Disclosure: None. This article is originally published at . Sign in to access your portfolio
Yahoo
25-04-2025
- Business
- Yahoo
This Top Oil Stock Aims to Get a $1 Billion Boost by the End of 2026
Devon Energy (NYSE: DVN) has become a cash-producing machine in recent years. The energy company has invested heavily to grow its scale across several key U.S. oil and gas production basins to reduce costs and enhance its ability to produce free cash flow. That strategy has paid big dividends for investors. It's producing significant excess free cash flow, to the tune of $3 billion last year, the bulk of which it's returning to shareholders through dividends and repurchases. It returned a total of $2 billion in 2024. However, Devon isn't resting on its laurels. The leading oil stock recently unveiled a bold goal to boost its pre-tax free cash flow by another $1 billion by the end of next year without the benefit of higher oil prices. Here's its strategy to squeeze more cash from its already lucrative oil business. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue » Devon Energy recently revealed its value-enhancing business optimization plan. That strategy aims to deliver a $1 billion improvement in its pre-tax free cash flow by the end of next year. The company plans to undertake several initiatives to reach its goal. Those steps include: Capital efficiency: Devon expects to capture efficiencies through design optimizations, cycle time reductions, facility standardization, and vendor management to save $300 million. Production optimization: The company plans to use advanced analytics to minimize maintenance events, reduce downtime, flatten production declines, and optimize its cost structure to generate $250 million in savings. Commercial opportunities: It aims to leverage its scale to enhance commercial contracts to increase realizations, improve recoveries, and lower its cost structure. These initiatives should yield a $300 million boost to its cash flow. Corporate cost reductions: Devon plans to reduce its interest expense and streamline its corporate cost structure to save another $150 million. These initiatives are already well under way. In the press release unveiling the plan, CEO Clay Gaspar stated: "Our organization has been diligently advancing this initiative and has already secured marketing agreements to drive a material margin improvement through year-end 2026. Concurrently, we have implemented technological advancements, including advanced analytics and process automation, that are further enhancing our operating performance." He noted that these efforts already have the company on track to achieve 30% of its target by the end of this year. That will help give the oil company a boost in the current environment, which has seen a significant recent drop in crude oil prices. Meanwhile, the CEO stated, "We have clear visibility into the remaining objectives and are highly confident in our ability to execute this plan effectively." The company's plan to boost its free cash flow by $1 billion by the end of next year is meaningful. It can help significantly cushion the blow of lower oil prices in the future. For example, at $60 West Texas Intermediate, which is right around the recent price, Devon would only produce about $1.5 billion in free cash flow this year, half of what it delivered last year when it realized an average of more than $75 a barrel for its crude. That suggests Devon's optimization plan would have the same impact as around a $10 increase in the price of a barrel of oil. That will help enhance the durability of its business and help cushion the impact of even lower oil prices in the future. Devon's ability to meaningfully boost its free cash flow will directly benefit shareholders. That's because the company continues to target returning 70% of its free cash flow to shareholders through dividends and share repurchases, retaining the other 30% to strengthen its already strong balance sheet. Given that target, its plan to boost its free cash flow positions it to return more money to investors in the future. Devon Energy's new business optimization plan will have a meaningful impact on the company. It will boost its free cash flow by $1 billion, giving it more cash to return to shareholders. The strategy will also help lessen the impact of lower oil prices in the future. These positives add to Devon's appeal as a long-term investment in the oil patch. Before you buy stock in Devon Energy, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Devon Energy wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $561,046!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $606,106!* Now, it's worth noting Stock Advisor's total average return is 811% — a market-crushing outperformance compared to 153% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of April 21, 2025 Matt DiLallo has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This Top Oil Stock Aims to Get a $1 Billion Boost by the End of 2026 was originally published by The Motley Fool
