Devon Energy Corporation (NYSE: DVN) and EQT Corporation (NYSE:EQT) are both large-cap oil & gas exploration and production – nec companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, risk, valuation, institutional ownership, profitability, analyst recommendations and dividends.
Devon Energy Corporation pays an annual dividend of $0.24 per share and has a dividend yield of 0.6%. EQT Corporation pays an annual dividend of $0.12 per share and has a dividend yield of 0.2%. Devon Energy Corporation pays out 8.2% of its earnings in the form of a dividend. EQT Corporation pays out 60.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Devon Energy Corporation is clearly the better dividend stock, given its higher yield and lower payout ratio.
Institutional & Insider Ownership
77.3% of Devon Energy Corporation shares are held by institutional investors. Comparatively, 99.6% of EQT Corporation shares are held by institutional investors. 0.5% of Devon Energy Corporation shares are held by company insiders. Comparatively, 1.0% of EQT Corporation shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.
Volatility and Risk
Devon Energy Corporation has a beta of 2.22, meaning that its stock price is 122% more volatile than the S&P 500. Comparatively, EQT Corporation has a beta of 0.79, meaning that its stock price is 21% less volatile than the S&P 500.
This is a summary of current ratings for Devon Energy Corporation and EQT Corporation, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Devon Energy Corporation||0||4||14||0||2.78|
Devon Energy Corporation currently has a consensus target price of $45.88, suggesting a potential upside of 20.02%. EQT Corporation has a consensus target price of $78.09, suggesting a potential upside of 28.86%. Given EQT Corporation’s higher probable upside, analysts clearly believe EQT Corporation is more favorable than Devon Energy Corporation.
This table compares Devon Energy Corporation and EQT Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Devon Energy Corporation||11.62%||6.88%||2.88%|
Valuation & Earnings
This table compares Devon Energy Corporation and EQT Corporation’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|Devon Energy Corporation||$12.20 billion||1.65||-$3.30 billion||$2.94||13.00|
|EQT Corporation||$1.61 billion||6.53||-$452.98 million||$0.20||303.00|
EQT Corporation has higher revenue, but lower earnings than Devon Energy Corporation. Devon Energy Corporation is trading at a lower price-to-earnings ratio than EQT Corporation, indicating that it is currently the more affordable of the two stocks.
Devon Energy Corporation beats EQT Corporation on 10 of the 16 factors compared between the two stocks.
Devon Energy Corporation Company Profile
Devon Energy Corporation is an independent energy company. The Company also controls EnLink Midstream Partners, L.P. (EnLink). The Company’s segments include U.S., Canada and EnLink. The Company is engaged primarily in the exploration, development and production of oil, natural gas and natural gas liquids (NGLs). The Company’s operations are concentrated in various North American onshore areas in the United States and Canada. The Company’s U.S. and Canada segments are primarily engaged in oil and gas exploration and production activities. EnLink is a master limited partnership (MLP) with a midstream business and operations located across the United States. EnLink focuses on providing gathering, transmission, processing, storage, fractionation and marketing to upstream oil and natural gas producers. The Company’s properties include Barnett Shale, Delaware Basin, Eagle Ford, Heavy Oil, Rockies Oil and STACK.
EQT Corporation Company Profile
EQT Corporation is a natural gas company. The Company operates through three segments: EQT Production, EQT Gathering and EQT Transmission. The EQT Production segment includes its exploration for, and development and production of, natural gas, natural gas liquids and a limited amount of crude oil, primarily in the Appalachian Basin. The EQT Production segment also includes the marketing activities of the Company. EQT Production’s properties are located in Pennsylvania, West Virginia, Kentucky and Virginia. The operations of EQT Gathering include the natural gas gathering activities of the Company, consisting solely of assets that are owned and operated by EQT Midstream Partners, LP (EQM). The operations of EQT Transmission include the natural gas transmission and storage activities of the Company, consisting solely of assets that are owned and operated by EQM. EQT Transmission focuses on various transmission projects, including Mountain Valley Pipeline and Transmission Expansion.
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