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"We rate DEVON ENERGY CORP (DVN) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth, compelling growth in net income, attractive valuation levels and expanding profit margins. We feel these strengths outweigh the fact that the company shows weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- DVN's very impressive revenue growth greatly exceeded the industry average of 6.5%. Since the same quarter one year prior, revenues leaped by 96.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
- DEVON ENERGY CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, DEVON ENERGY CORP continued to lose money by earning -$0.10 versus -$0.48 in the prior year. This year, the market expects an improvement in earnings ($5.34 versus -$0.10).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 136.8% when compared to the same quarter one year prior, rising from $429.00 million to $1,016.00 million.
- The gross profit margin for DEVON ENERGY CORP is rather high; currently it is at 53.05%. 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 19.04% significantly outperformed against the industry.
- You can view the full analysis from the report here: DVN Ratings Report