Devon Energy had been a heavy hitter in the oil industry since it entered the scene. So any company that can be called comparable you have to give it a chance. Here are a few companies that are performing well and seem to be following in the footsteps of Devon.
Current shareholders should hold Devon Energy (NYSE:DVN) long-term, interested investors may consider 2012 as an opportune entry point to initiate a position on this stock. Devon Energy has comparable metrics to its peers, its dividend is adequate, it's effectively increasing its liquid production, it has a robust portfolio of assets in North America and Devon is in the midst of a transition to increase operational efficiencies and reduce costs. Like most E&Ps, Devon's stock, revenues and earnings are highly susceptible to fluctuations in the commodity markets. Devon is especially constrained and capable of an uptick because its assets are in North America and haven't benefited from increasing prices abroad.
Based on their portfolios of assets, market cap and price per share, EOG Resources (NYSE:EOG), Apache (NYSE:APA), Anadarko Petroleum (NYSE:APC) and Noble Energy (NYSE:NBL) are the independent E&Ps most comparable to Devon Energy. Devon and Apache's price are both around 10.4 times earnings; Nobel Energy and EOG Resources are around 22 and 26 times earnings, respectively. Devon's price is around 2.2 times sales and 1.1 times its book value; only Apache has lower price ratios. Devon's current ratio is around 1.8 and its debt-to-equity ratio is around 0.48. Devon Energy's annualized dividend is around $0.80 per share.
Devon's $5.96 EPS has declined 3.6% in 2012 and is projected to increase 49% in 2013 - this is the highest projection of EPS growth among these E&Ps. Apache's $8.35 EPS is the highest among the E&Ps while EOG's 549% EPS growth in 2012, is the highest among the aforementioned. Devon's sales have increased 3.2% in the past 5 years - this is the lowest sales growth among these E&Ps. Devon's ROE is around 11.1%, its operating margin is around 33%, and its profit margin is around 22%. Devon has the highest profit margin among these E&Ps. Apache's 11.9% ROE and 37.3% operating margin are the highest among these E&Ps.
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Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.