Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
NEW YORK (
-- Devon Energy
) has been reiterated by TheStreet Ratings as a hold with a ratings score of C+ . The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, expanding profit margins and notable return on equity. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, weak operating cash flow and a generally disappointing performance in the stock itself.
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Highlights from the ratings report include:
- Despite currently having a low debt-to-equity ratio of 0.48, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Despite the fact that DVN's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.63 is high and demonstrates strong liquidity.
- The gross profit margin for DEVON ENERGY CORP is rather high; currently it is at 67.90%. Regardless of DVN's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, DVN's net profit margin of 18.60% compares favorably to the industry average.
- DVN, with its decline in revenue, underperformed when compared the industry average of 1.1%. Since the same quarter one year prior, revenues fell by 20.5%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 82.6% when compared to the same quarter one year ago, falling from $2,743.00 million to $477.00 million.
- Net operating cash flow has declined marginally to $1,426.00 million or 8.00% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, DEVON ENERGY CORP has marginally lower results.
Devon Energy Corporation, an independent energy company, engages primarily in exploration, development, and production of oil, natural gas, and natural gas liquids. The company has a P/E ratio of 10.4, equal to the average energy industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Devon Energy has a market cap of $25.06 billion and is part of the
industry. Shares are down 1.7% year to date as of the close of trading on Wednesday.
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--Written by a member of TheStreet Ratings Staff.
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