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Post by win1177 on Aug 18, 2023 19:11:20 GMT
Wondering what others think of Devon Energy here? I hold ZERO energy, but my wife holds a sizable chunk of Exxon, which has done fairly well recently after years of marginal performance. Devon Energy looks as if they are a very well run company, implemented a “variable” dividend policy in 2021 and merged with WPX energy. Holds some very low cost reserves, so “should” remain profitable even if prices drop significantly, which they periodically do in oil/ gas. Current P/E very low at 6.7, looks to have a good plan for gradual development of their reserves. Morningstar has them at a 2 star rating, (for what that’s worth).
Thoughts on Devon here, pros and cons?
Win
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Post by richardsok on Aug 18, 2023 20:12:06 GMT
Wondering what others think of Devon Energy here? I hold ZERO energy, but my wife holds a sizable chunk of Exxon, which has done fairly well recently after years of marginal performance. Devon Energy looks as if they are a very well run company, implemented a “variable” dividend policy in 2021 and merged with WPX energy. Holds some very low cost reserves, so “should” remain profitable even if prices drop significantly, which they periodically do in oil/ gas. Current P/E very low at 6.7, looks to have a good plan for gradual development of their reserves. Morningstar has them at a 2 star rating, (for what that’s worth). Thoughts on Devon here, pros and cons? Win DVN TipRanks: moderately favorable 7/10 GoldmanSachs upgraded it to "buy" in June Merrill Lynch: neutral Has been recently selling oil for about $70/barrel, down from over $90 last year, BUT production has been growing. As we all know, gasoine prices have risen at the pump in the past month or so. If you believe oil will continue to rise in price, then I'd agree your DVN is an oppty. If not, yeah, still sorta good. Stock price appears fairly firm right here. I could see myself selling some OTM naked puts on it -- to try to snag a bargain -- if I still played in that sandbox. FWIW. |
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Post by bizman on Aug 18, 2023 20:29:44 GMT
E & P stocks are way outside my circle of competence and comfort zone. This one goes in my too hard pile.
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Post by Fearchar on Aug 18, 2023 21:07:09 GMT
Most Energy Companies are profitable right now. So, I would not be swayed very much by that. The problem though is valuation and growth prospects. Considering their growth prospects, they are generally over valued. Devon is distinguishing itself though with its stock price momentum; which is terrible. Seeking Alpha analyst are positive on DVN; 4.09 Wall Street pro's are more impressed with Diamondback FANG EOG EOG Conoco COP Valero VLO Marathon MPC These firms have slightly better growth prospects.  |
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Post by mnfish on Aug 19, 2023 12:17:18 GMT
Qtrly financials from Yahoo - 6/30/22-6/30/23
Revenue - Down 38%
Oper Income - Down 63%
EPS - Down 63%
Cost of revenue was only down 18% - So revenue is declining faster than costs (which they are working on)
I would guess that their variable dividend is going to come down as well.
IMO - the reason the PE is low is that markets expect further downside to Earnings.
Wells Fargo rates it Equal Weight with a price target of $52. (Bear in mind in Jan 23 price target was $70, in Feb 23 it was $59)
" It appears we need to wait at least one more quarter for DVN to deliver improving capital efficiency in line with investors' desires and many peers' performance. Sticking with EW
rating and NAV-based $52 PT."
"Any capital efficiency degradation (well productivity declines or more capital allocation to non-Delaware assets) also represents a capital efficiency risk, in our view."
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Post by liftlock on Aug 22, 2023 19:44:45 GMT
The performance of DVN is going to largely depend on the price of energy. The impact of oil and gas prices one the cash flows of DVN can be observed by looking at the supplemental data tables found here: www.devonenergy.com/news/2023/Devon-Energy-Reports-Second-Quarter-2023-Results-and-Declares-Quarterly-DividendDVN recently suspended it's large variable dividend which may cause some some loss of interest in holding the stock in the near term. I have an 18% portfolio allocation to energy, including a 1% allocation to DVN, my worst performing energy stock at a 10% loss position. I plan on holding DVN as a bet on strong long term demand for fossil fuels, including cleaner natural gas, where prices are depressed. DVN should benefit when the US capacity to export LNG expands next year. |
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