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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Devon Energy Corporation (XNYS:DVN) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
DVN
Name:
DEVON ENERGY CORPORATION (XNYS:DVN)
Sector:
1.30B
Industry:
Oil & Gas E&P
CEO:
Mr. David Hager
Total Employees:
1,600
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -127.04% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF DEVON ENERGY CORPORATION(DVN) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND OIL & GAS E&P INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
70.34
One Month Price Target:
$71.32
Six Month Price Target :
$76.21
Likely Price in One Year's Time:
Ticker:
$82.07
Likely Trading Range Today Under (Normal Volatility)
$69.98
Price Upper limit ($) :
$71.07
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$63.97
This week:
$56.09
This month :
$41.84
Other Primary facts
Market Cap:
45.53B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
654.80M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
21.07%
-37.4%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$99.87
$86.02
$40.81
$54.66
Medium risk (<10%) entry points
Buy Call
Sell Call
$81.51
Buy Put:
Sell Put:
$78.56
$59.13
$62.12
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
DVN
Sharpe Ratio:
5.66%
Comparison:
DVN, is amongst the top 20% stocks with highest risk-adjusted returns
Sharpe ratio is 23.15% higher than the industry
& ratio is 148.31% higher than the market/S&P 500 average
Average Returns/Yield of
DVN
Daily returns:
0.27%
Weekly returns:
1.33%
Monthly returns:
5.32%
Yearly returns:
61.42%
Comparison of returns:
Average annual returns/yield (last 3 years) is 3.89% above industry average
Classification:
DVN, is amongst the top 20% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.82
Statistical test of Returns:
DVN has not yielded statistically significant higher returns when compared to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
4.54%
Weekly Volatility:
10.15%
Monthly Volatility:
20.31%
Yearly Volatility:
70.35%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
3.34%
Volatility in last five trading days has been -26.51% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-9.06%
Weekly VaR:
-20.26%
Monthly VaR:
-40.52%
How Much Can the price of
DVN
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-33%
Worst case (decline):
>85%
This translates to price declining to:
$47.29
This translates to price declining to:
$10.55
Severe Crash Probability
Risk of crash in next 6/12 months: Very high (>70%)
What is Value at Risk (VaR)?
Risk Fundamentals
DVN is a 185.99% riskier investment compared to the market/S&P 500 & is 145.01% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -14.93% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
DVN
Beta in relation to market/S&P 500--2.48
Expected beta in 1 year's time:
1.216
Expected beta in 3 year's time:
1.72
Unlevered (debt free) Beta:
1.53
Beta in relation to Nasdaq (XNAS):
1.044
Beta in relation to all global stocks::
1.14
Beta Comparison & Analysis
Beta of competitors/peers::
1.763
Beta is 40.78% higher than peers
Average Industry Beta:
2.012
Beta is 23.36% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
-
-
Alpha provided | Alpha Analysis
Alpha provided:
0.437
Alpha is -1.87% below industry average alpha yield
Alpha is 2779% higher than market/& is unsustainably high
Analysis of Cost of Capital of
DVN
Equity cost of capital:
0.202
Equity cost of capital is 19.02% above industry mean WACC
Unlevered (without debt) cost of capital:
12.42%
Before-tax cost of debt:
5.58%
After-tax cost of debt:
4.41%
Overall debt rating:
Lower BB medium grade (Fifth highest grade)
Weighted average cost of capital (WACC):
4.41%
WACC is 9.15% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$21.33
Revenue growth rate per share of (3Y):
4.88
Annual revenue growth rate is -122.62% below industry average
EPS:
$5.34
Expected Annual growth rate of EPS (3Y):
0.00%
-
Free cash flow (FCF) per share:
$6.25
Balance sheet equity growth per share: 550.51%
Equity growth rate per share is 341.14% higher than the industry
Debt per share
$10.27
EBITDA per share
$10.27
Valuation Analysis Today of
DVN
P/E Ratio:
8.92
P/E Ratio of Competitors/Peers:
11.25
P/E ratio is -20.72% lower than main peers & is -78.83% lower than the industry
Stock price/value with industry average P/E ratio: $224.88
DVN is -68.72% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
3.3
Price to sales ratio is -33.02% below the industry mean
P/B (Price to book value ratio):
4.88
Price to free cash flow: 11.26
-
Net income growth rate (3Y):
-32.33%
Net income growth rate is -104.55% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 18.58%
Dividend yeild: 5.12%
Previous Dividend: $1.27
Previous adjusted dividend: $1.27
Previous Dividend: $3.60
Expected next dividend best case: $1.61
Expected next dividend worst case: $0.93
Average dividend payment (long-term): $0.45
Average dividend increase/decrease (growth rate) % per period: 40.98%
Expected next dividend payment date: 28/09/2022
Expected next dividend record date: 09/12/2022
-
Previous dividend payment date: 30/06/2022
Previous dividend record date: 13/06/2022
-
Dividend History:
2022-06-10--$1.27
2021-12-09--$0.84
2021-06-11--$0.34
2022-03-11--$1.00
2021-09-10--$0.49
2021-05-13--$0.34
Dividend growth rate is -0.96% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
72.28%
Net debt to equity ratio:
45.67%
Debt to assets ratio:
30.87%
Net debt to assets ratio:
19.50%
Debt-to-asset ratio is -42.05% below industry average
Ability to repay debt:
Interest coverage ratio:
17.93
Interest coverage ratio is 126.08% more than industry average
Looking forward:
Debt growth rate:
48.20%
Annual debt growth is -98% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.00%
Analysis of Key Statistics
Correlation of price movement with the market:
0.525
Statistical significance of correlation:
DVN has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.394
Stock price is 33.09% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.394
Correlation of price movement with Nasdaq (^IXIC):
0.063
Covariance of price movement with the market:
0.167
Kurtosis
8.924
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
-0.478
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
DVN
Gross Profit Margin Ratio:
129%
Operating Profit Margin Ratio:
31.15%
Operating profit margin is -2364.22% lower than the industry
Net Profit Margin Ratio:
129%
Effective Tax Rate:
13.84%
Effective tax rate is -30.09% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
38.59%
Return on equity (ROE) is 353.33% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
16.48%
Return on assets (ROA) is 616.80% higher than the industry
Financial Leverage:
1.4x
Current Ratio:
1.32
Current ratio is -33.67% below industry average
Cash Conversion Cycle (days):
26.1
Cash conversion cycle is -63.06% below industry average
The remaining useful life of property plant & equipment is: 7.6 years
Stock based compensation to net income ratio:
0.56%
In-depth Efficiency Analysis
Revenue generated per employee:
8.7M
Each employee generates 9% more revenue than industry average revenue per employee
EBITDA generated per employee:
4.2M
Each employee generates 72% more EBITDA than industry average revenue per employee
Profit generated per employee:
2.2M
Each employee generates 436% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
811.9K
Each employee generates -981% less free cash flow than industry average revenue per employee
Assets/Capital per employee
10.5M
Each employee generates -981% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
DVN
VALERO ENERGY CORPORATION (XNYS:VLO)
THE WILLIAMS COMPANIES, INC. (XNYS:WMB)
MPLX COM UNT (XNYS:MPLX)
PHILLIPS 66 (XNYS:PSX)
ENERGY TRANSFER UNT (XNYS:ET)
ONEOK, INC. (XNYS:OKE)
Cenovus Energy Inc. (XNYS:CVE)
SUNCOR ENERGY INC. (XNYS:SU)
Ecopetrol SA (XNYS:EC)
Current Analyst Ratings
Strong buy�42%
Buy�54%
Hold�38%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
13.97B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
9.19B
4.78B
-
378.00M
378.00M
-
48.00M
426.00M
2.00M
375.00M
2.18B
6.72B
4.35B
3.59B
4.19B
580.00M
3.59B
Statement of Cash Flow
Date:
Period:
-
Differed Income Tax :
164.00M
Stock Based Compensation :
20.00M
Change in Working Capital :
- 143000.00K
Accounts Receivables:
- 457000.00K
Other Working Capital:
-
Other Non-Cash Items:
801.00M
Net Cash Provided by Operating Activities:
1.84B
Investments in PP&E:
- 1000.00K
Net Acquisitions:
- 22000.00K
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
2.48B
-
2.48B
2.00B
-
496.00M
4.97B
15.30B
753.00M
-
416.00M
-
333.00M
16.81B
-
21.78B
576.00M
-
-
-
3.18B
3.75B
6.72B
1.42B
8.59B
-
12.34B
66.00M
2.01B
- 131000.0K
-
March 31, 2022 at 6:00:00 AM
9.62B
9.30B
21.64B
-
6.72B
4.2B
-
- 503000.00K
- 526000.00K
-
-
- 211000.00K
- 667000.00K
- 81000.00K
- 959000.00K
2.00M
354.00M
2.63B
2.27B
1.84B
- 538000.00K
1.30B
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
DVN
2023
2024
2025
2026
2027
$78.21
$91.26
$106.48
$124.24
$144.97