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Devon Energy Corporation powers millions of lives by tapping into the vast reserves of oil and natural gas beneath the U.S. soil, fueling industries and households alike. As a leading independent energy company, Devon stands out with its extensive portfolio of over 5,000 wells and a strong reputation for operational efficiency and innovation in exploration and production. The question now is whether Devon’s solid fundamentals and disciplined growth strategy continue to support its market valuation and future profitability.
Table of contents
Business Model & Company Overview
Devon Energy Corporation, founded in 1971 and headquartered in Oklahoma City, Oklahoma, stands as a leading independent player in the Oil & Gas Exploration & Production sector. With a portfolio centered on the exploration, development, and production of oil, natural gas, and natural gas liquids, the company manages approximately 5,134 gross wells across the United States. Its integrated approach creates a cohesive energy ecosystem that fuels its core mission of delivering reliable energy resources.
The company’s revenue engine balances upstream operations focused on resource extraction with a strategic footprint in key domestic markets. This blend of capital-intensive production and operational efficiency underpins its value creation. Devon Energy’s strong presence in the U.S. energy landscape, supported by 2,300 full-time employees, establishes a durable economic moat that continues to influence the future trajectory of the energy industry.
Financial Performance & Fundamental Metrics
I will analyze Devon Energy Corporation’s income statement, key financial ratios, and dividend payout policy to provide a clear picture of its fundamental strength.
Income Statement
The table below summarizes Devon Energy Corporation’s key income statement figures over the last five fiscal years, reflecting revenue, expenses, earnings, and earnings per share.
| 2020 | 2021 | 2022 | 2023 | 2024 | |
|---|---|---|---|---|---|
| Revenue | 4.35B | 13.75B | 19.83B | 15.14B | 15.57B |
| Cost of Revenue | 4.60B | 8.54B | 10.85B | 9.94B | 11.30B |
| Operating Expenses | 338M | 391M | 395M | 408M | 500M |
| Gross Profit | -252M | 5.21B | 8.97B | 5.20B | 4.27B |
| EBITDA | -1.36B | 5.42B | 10.38B | 7.57B | 7.43B |
| EBIT | -2.81B | 3.26B | 8.12B | 4.99B | 4.14B |
| Interest Expense | 282M | 361M | 347M | 363M | 401M |
| Net Income | -2.68B | 2.78B | 6.02B | 3.75B | 2.89B |
| EPS | -7.12 | 4.20 | 9.15 | 5.86 | 4.57 |
| Filing Date | 2021-02-17 | 2022-02-16 | 2023-02-15 | 2024-02-28 | 2025-02-19 |
Income Statement Evolution
From 2020 to 2024, Devon Energy’s revenue showed strong overall growth of 258%, although the most recent year experienced a modest 2.8% increase. Net income rose by 208% over the full period but declined nearly 25% in the last year. Gross and EBIT margins remain favorable at 27.4% and 26.6%, respectively, despite recent margin contractions, reflecting some cost pressures.
Is the Income Statement Favorable?
In 2024, Devon Energy reported revenue of $15.6B and net income of $2.9B, with a net margin of 18.6%, all considered favorable metrics. However, year-on-year declines in gross profit (-17.9%), EBIT (-17%), and EPS (-21.8%) suggest rising costs and margin pressure. Interest expenses remain low at 2.6% of revenue, supporting earnings stability. Overall, fundamentals are broadly favorable but warrant cautious monitoring.
Financial Ratios
The table below summarizes key financial ratios for Devon Energy Corporation over the fiscal years 2020 to 2024, providing an overview of profitability, liquidity, leverage, efficiency, and shareholder returns:
| Ratios | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| Net Margin | -61.7% | 20.2% | 30.3% | 24.7% | 18.6% |
| ROE | -93.0% | 30.0% | 53.9% | 31.1% | 19.9% |
| ROIC | -5.7% | 26.3% | 31.9% | 17.8% | 10.8% |
| P/E | -2.22 | 10.5 | 6.66 | 7.73 | 7.05 |
| P/B | 2.07 | 3.15 | 3.59 | 2.40 | 1.41 |
| Current Ratio | 2.26 | 1.38 | 1.25 | 1.07 | 1.04 |
| Quick Ratio | 2.26 | 1.34 | 1.19 | 0.99 | 0.95 |
| D/E | 1.58 | 0.73 | 0.60 | 0.53 | 0.63 |
| Debt-to-Assets | 45.8% | 32.0% | 28.2% | 26.3% | 30.2% |
| Interest Coverage | -2.09 | 13.3 | 24.7 | 13.2 | 9.40 |
| Asset Turnover | 0.44 | 0.65 | 0.84 | 0.62 | 0.51 |
| Fixed Asset Turnover | 0.77 | 0.90 | 1.08 | 0.77 | 0.61 |
| Dividend Yield | 4.31% | 4.50% | 8.44% | 6.42% | 4.60% |
Evolution of Financial Ratios
Over the period ending 2024, Devon Energy’s Return on Equity (ROE) showed a decline from a peak of 53.86% in 2022 to 19.94% in 2024, indicating reduced profitability. The Current Ratio decreased steadily from 2.26 in 2020 to about 1.04 in 2024, reflecting a tightening liquidity position. The Debt-to-Equity Ratio trended downward from 1.58 in 2020 to 0.63 in 2024, suggesting improved leverage management.
Are the Financial Ratios Favorable?
As of 2024, profitability ratios including net margin at 18.57% and ROE at 19.94% are favorable, supported by a solid interest coverage ratio of 10.32. Liquidity ratios such as current and quick ratios remain neutral, indicating adequate but not excessive short-term financial flexibility. Leverage measures, including debt-to-equity at 0.63 and debt-to-assets at 30.18%, are also neutral. Efficiency ratios show mixed signals, with asset turnover neutral and fixed asset turnover unfavorable. Overall, the financial ratios present a generally favorable picture.
Shareholder Return Policy
Devon Energy Corporation maintains a dividend payout ratio around 32%, with a 2024 dividend per share of $1.50 and an annual yield near 4.6%. The company supports distributions through operating cash flow, though free cash flow was negative in 2024, suggesting some coverage risk. Share buybacks are part of capital returns but exact buyback amounts are not specified.
The policy balances steady dividends with manageable payout ratios, supporting shareholder returns while maintaining prudent financial leverage. However, the negative free cash flow in 2024 may warrant caution regarding sustainability if not addressed, indicating a need for ongoing monitoring of cash generation relative to dividend and buyback commitments.
Score analysis
The following radar chart presents a comprehensive view of Devon Energy Corporation’s key financial scores across various metrics:
Devon’s scores show strong profitability with very favorable returns on equity and assets (both scoring 5). The discounted cash flow score is favorable at 4, but leverage is a concern with a very unfavorable debt-to-equity score of 1. Valuation metrics reflect moderate scores, with price-to-earnings at 2 and price-to-book at 3.
Analysis of the company’s bankruptcy risk
Devon Energy’s Altman Z-Score places the company in the grey zone, indicating a moderate risk of bankruptcy and some financial uncertainty:
Is the company in good financial health?
The Piotroski Score diagram offers insight into Devon Energy’s current financial health status:
With a Piotroski Score of 5, Devon Energy is considered to have average financial health, reflecting a balance of strengths and weaknesses in profitability, leverage, liquidity, and operational efficiency.
Competitive Landscape & Sector Positioning
This section provides an overview of Devon Energy Corporation’s strategic position within the Oil & Gas Exploration & Production sector, focusing on key operational and financial aspects. I will examine whether Devon Energy holds a competitive advantage relative to its main industry peers.
Strategic Positioning
Devon Energy Corporation concentrates its operations primarily in the United States, focusing on oil, natural gas, and natural gas liquids production, with its revenue heavily derived from the U.S. market. It maintains a limited geographic footprint and a product portfolio centered on upstream energy commodities.
Revenue by Segment
This pie chart illustrates Devon Energy Corporation’s revenue distribution by business segment for the fiscal year 2024, highlighting the contributions of different product lines.
Devon Energy’s revenue in 2024 is primarily driven by N G L Product Sales at 11.2B USD, showing a moderate increase from 10.8B USD in 2023. Earlier years reveal a more diversified segment structure, including notable revenues from United States and Canada Business Segments. The recent focus on N G L Product Sales suggests a concentration shift, with less segment diversification compared to previous periods. This concentration may affect risk exposure but aligns with market trends in energy product demand.
Key Products & Brands
The table below outlines Devon Energy Corporation’s key products and brands along with their descriptions:
| Product | Description |
|---|---|
| Oil | Exploration, development, and production of crude oil primarily in the United States. |
| Natural Gas | Extraction and production of natural gas from approximately 5,134 gross wells in the US. |
| Natural Gas Liquids (NGLs) | Sales of natural gas liquids, a significant revenue segment reaching $11.2B in 2024. |
| United States Business Segment | Core operational segment focused on energy production within the United States. |
| Canada Business Segment | Energy exploration and production activities conducted in Canada. |
Devon Energy Corporation’s key offerings center on oil, natural gas, and NGLs, with a predominant focus on operations in the United States complemented by Canadian activities. The company leverages a large well portfolio and specializes in energy resource production.
Main Competitors
There are 10 main competitors in the Oil & Gas Exploration & Production sector; here are the top 10 leaders by market capitalization:
| Competitor | Market Cap. |
|---|---|
| ConocoPhillips | 120.5B |
| EOG Resources, Inc. | 58.8B |
| Diamondback Energy, Inc. | 44.3B |
| Occidental Petroleum Corporation | 41.8B |
| EQT Corporation | 33.4B |
| Expand Energy Corporation | 26.1B |
| Devon Energy Corporation | 24.2B |
| Texas Pacific Land Corporation | 20.5B |
| Coterra Energy Inc. | 20.3B |
| APA Corporation | 9.0B |
Devon Energy Corporation ranks 7th among its top 10 competitors, with a market cap at 20.36% of the leader, ConocoPhillips. It is positioned below both the average market cap of the top 10 (39.9B) and the median market cap of the sector (29.8B). Devon Energy maintains a 6.58% market cap lead over its closest competitor above, indicating a moderate gap in scale within this competitive landscape.
Comparisons with competitors
Check out how we compare the company to its competitors:
Does DVN have a competitive advantage?
Devon Energy Corporation presents a competitive advantage, evidenced by a very favorable moat status with a ROIC exceeding its WACC by 4.78%, indicating value creation and efficient capital use. The company’s growing ROIC trend of 288% over 2020-2024 underlines its increasing profitability and durable competitive position.
Looking ahead, Devon Energy’s future outlook includes opportunities tied to its extensive operations across approximately 5,134 gross wells in the U.S. While recent revenue growth shows some challenges, the company’s established asset base and energy sector positioning may offer potential for expansion and adaptation to evolving market conditions.
SWOT Analysis
This SWOT analysis highlights Devon Energy Corporation’s key internal strengths and weaknesses, alongside external opportunities and threats, to guide strategic investment decisions.
Strengths
- strong profitability with 18.57% net margin
- favorable ROE near 20%
- durable competitive advantage with growing ROIC
- solid dividend yield at 4.6%
Weaknesses
- recent 1-year revenue and margin declines
- moderate debt-to-equity ratio with low debt score
- fixed asset turnover below industry average
Opportunities
- expanding US energy demand
- potential to improve operational efficiency
- favorable energy price environment
Threats
- volatile commodity prices
- regulatory and environmental risks
- competition from renewable energy sources
Devon Energy’s solid profitability and competitive moat position it well, but recent margin pressures and leverage concerns require caution. Strategic focus should target efficiency improvements and risk mitigation amid market volatility.
Stock Price Action Analysis
The following weekly chart illustrates Devon Energy Corporation’s stock price movements over the past 12 months, highlighting key volatility and trend shifts:
Trend Analysis
Over the past 12 months, Devon Energy’s stock price declined by 12.95%, reflecting a bearish trend with accelerating downward momentum. Price volatility is high, with a standard deviation of 6.37. The stock reached a high of 53.42 and a low of 28.23, underscoring significant price swings during this period.
Volume Analysis
Trading volumes over the last three months show increasing market participation, with buyer-driven activity dominating at 65.09%. Buyer volume outpaced sellers significantly, suggesting growing investor interest and positive sentiment amid recent price recovery phases.
Target Prices
The consensus target prices for Devon Energy Corporation reflect a moderately bullish outlook from analysts.
| Target High | Target Low | Consensus |
|---|---|---|
| 46 | 41 | 42.9 |
Analysts expect Devon Energy’s stock to trade between 41 and 46, with a consensus price near 43, suggesting steady potential upside.
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Analyst & Consumer Opinions
This section presents an overview of analyst ratings and consumer feedback on Devon Energy Corporation’s recent performance.
Stock Grades
The following table summarizes the latest verified analyst grades for Devon Energy Corporation (DVN) from reputable financial institutions:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Morgan Stanley | Maintain | Overweight | 2026-01-23 |
| Barclays | Maintain | Equal Weight | 2026-01-21 |
| Scotiabank | Downgrade | Sector Perform | 2026-01-16 |
| Bernstein | Maintain | Outperform | 2026-01-05 |
| Roth Capital | Maintain | Buy | 2025-12-31 |
| Citigroup | Maintain | Buy | 2025-12-17 |
| UBS | Upgrade | Buy | 2025-12-12 |
| Mizuho | Maintain | Outperform | 2025-12-12 |
| Morgan Stanley | Maintain | Overweight | 2025-12-11 |
| JP Morgan | Upgrade | Overweight | 2025-12-08 |
The overall trend indicates a generally positive outlook with multiple upgrades and a consensus rating of Buy. Most analysts maintain or upgrade their ratings, though one notable downgrade from Scotiabank suggests some caution within the sector.
Consumer Opinions
Devon Energy Corporation (DVN) has garnered a mix of praise and criticism from its customer base, reflecting diverse consumer experiences in the energy sector.
| Positive Reviews | Negative Reviews |
|---|---|
| Reliable energy supply with minimal disruptions | Customer service can be slow to respond |
| Competitive pricing compared to other providers | Occasional billing errors reported |
| Transparent communication about outages and issues | Limited renewable energy options available |
| Strong local community involvement | Some customers find contract terms complex |
Overall, consumers appreciate Devon Energy’s reliability and competitive pricing, though recurring concerns include customer service responsiveness and limited renewable energy offerings. These insights highlight areas for potential improvement in customer relations and sustainability initiatives.
Risk Analysis
The following table summarizes key risks for Devon Energy Corporation, highlighting their likelihood and potential impact:
| Category | Description | Probability | Impact |
|---|---|---|---|
| Commodity Price | Volatility in oil and natural gas prices affecting revenue | High | High |
| Regulatory | Changes in environmental and energy regulations | Medium | High |
| Financial Leverage | Elevated debt-to-equity ratio indicating financial risk | Medium | Medium |
| Operational | Challenges in managing over 5,100 wells and production efficiency | Medium | Medium |
| Market | Fluctuations in trading volume and market sentiment | Medium | Medium |
The most significant risks for Devon Energy are commodity price volatility and regulatory changes. Despite favorable profitability and valuation metrics, the company’s debt level remains a concern, reflected in a grey zone Altman Z-score of 2.28. Investors should monitor energy market trends and regulatory developments closely.
Should You Buy Devon Energy Corporation?
Devon Energy Corporation appears to be characterized by improving profitability and a durable competitive moat supported by growing ROIC, while its leverage profile could be seen as substantial. Despite mixed credit signals, the overall rating suggests a cautious but favorable investment profile.
Strength & Efficiency Pillars
Devon Energy Corporation displays solid profitability with a net margin of 18.57% and a return on equity (ROE) of 19.94%, indicating efficient use of shareholder capital. Its return on invested capital (ROIC) stands at 10.8%, well above the weighted average cost of capital (WACC) of 6.02%, confirming that the company is a clear value creator. Financial health metrics are moderate, with an Altman Z-Score in the grey zone at 2.28 and a Piotroski Score of 5, reflecting average financial strength but no immediate distress signals. These pillars underpin a durable competitive advantage with growing profitability.
Weaknesses and Drawbacks
Despite favorable valuation metrics, Devon faces challenges with a high debt-to-equity ratio of 0.63, signaling moderate leverage that could constrain flexibility in a volatile market. The current ratio of 1.04 and quick ratio of 0.95 suggest tight liquidity, potentially limiting short-term resilience. The company’s price-to-earnings (P/E) ratio at 7.05 and price-to-book (P/B) ratio of 1.41 are reasonable, yet past one-year declines in key profitability growth rates—net margin down 24.96% and earnings per share (EPS) down 21.75%—highlight near-term operational pressures. The bearish overall stock trend with a -12.95% price change amplifies these risks.
Our Verdict about Devon Energy Corporation
Devon Energy’s long-term fundamental profile appears favorable, supported by strong value creation and solid profitability metrics. The recent period’s buyer dominance and positive short-term price trend with a 14.66% increase may suggest improving market sentiment. Taken together, the profile may appear attractive for long-term exposure, though investors should cautiously monitor the company’s leverage and recent operational headwinds before committing.
Disclaimer: This content is for informational purposes only and does not constitute financial, investment, or other professional advice. Investing in financial markets involves a significant risk of loss, and past performance is not indicative of future results.
Additional Resources
- Devon Energy Corporation (NYSE:DVN) Given Consensus Rating of “Moderate Buy” by Analysts – MarketBeat (Jan 24, 2026)
- Devon Energy Has Continued Room To Grow (NYSE: DVN) – Seeking Alpha (Jan 23, 2026)
- Is It Time To Reconsider Devon Energy (DVN) After Mixed Share Price Performance? – Yahoo Finance (Jan 21, 2026)
- Here’s what to expect from Devon Energy’s next earnings report – MSN (Jan 22, 2026)
- Teacher Retirement System of Texas Acquires 99,395 Shares of Devon Energy Corporation $DVN – MarketBeat (Jan 24, 2026)
For more information about Devon Energy Corporation, please visit the official website: devonenergy.com
