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 . Among the primary strengths of the company is its solid financial position based on a variety of debt and liquidity measures that we have evaluated. At the same time, however, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins.
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Highlights from the ratings report include:
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 3.0%. Since the same quarter one year prior, revenues slightly dropped by 0.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- Despite currently having a low debt-to-equity ratio of 0.55, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.39 is sturdy.
- DEVON ENERGY CORP has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, DEVON ENERGY CORP swung to a loss, reporting -$0.48 versus $5.13 in the prior year. This year, the market expects an improvement in earnings ($3.65 versus -$0.48).
- The gross profit margin for DEVON ENERGY CORP is rather low; currently it is at 25.00%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -13.83% is significantly below that of the industry average.
- Net operating cash flow has decreased to $1,143.00 million or 43.13% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
Devon Energy Corporation, an independent energy company, engages primarily in exploration, development, and production of oil, natural gas, and natural gas liquids (NGLs). Devon Energy has a market cap of $23.19 billion and is part of the basic materials sector and energy industry. Shares are up 9.4% year to date as of the close of trading on Thursday.
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--Written by a member of TheStreet Ratings Staff.