We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Is Devon Energy (DVN) Stock Undervalued Right Now?
Read MoreHide Full Article
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One company value investors might notice is Devon Energy (DVN - Free Report) . DVN is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 7.20, which compares to its industry's average of 9.39. Over the past year, DVN's Forward P/E has been as high as 10.82 and as low as 6.41, with a median of 8.14.
We also note that DVN holds a PEG ratio of 0.65. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. DVN's industry has an average PEG of 0.94 right now. DVN's PEG has been as high as 1.20 and as low as 0.12, with a median of 0.15, all within the past year.
Another notable valuation metric for DVN is its P/B ratio of 2.19. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 2.27. DVN's P/B has been as high as 3.07 and as low as 2.13, with a median of 2.48, over the past year.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. DVN has a P/S ratio of 1.74. This compares to its industry's average P/S of 1.78.
Finally, our model also underscores that DVN has a P/CF ratio of 4.51. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. DVN's current P/CF looks attractive when compared to its industry's average P/CF of 7.17. Within the past 12 months, DVN's P/CF has been as high as 5.74 and as low as 4.13, with a median of 4.68.
These are only a few of the key metrics included in Devon Energy's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, DVN looks like an impressive value stock at the moment.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Is Devon Energy (DVN) Stock Undervalued Right Now?
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One company value investors might notice is Devon Energy (DVN - Free Report) . DVN is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 7.20, which compares to its industry's average of 9.39. Over the past year, DVN's Forward P/E has been as high as 10.82 and as low as 6.41, with a median of 8.14.
We also note that DVN holds a PEG ratio of 0.65. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. DVN's industry has an average PEG of 0.94 right now. DVN's PEG has been as high as 1.20 and as low as 0.12, with a median of 0.15, all within the past year.
Another notable valuation metric for DVN is its P/B ratio of 2.19. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 2.27. DVN's P/B has been as high as 3.07 and as low as 2.13, with a median of 2.48, over the past year.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. DVN has a P/S ratio of 1.74. This compares to its industry's average P/S of 1.78.
Finally, our model also underscores that DVN has a P/CF ratio of 4.51. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. DVN's current P/CF looks attractive when compared to its industry's average P/CF of 7.17. Within the past 12 months, DVN's P/CF has been as high as 5.74 and as low as 4.13, with a median of 4.68.
These are only a few of the key metrics included in Devon Energy's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, DVN looks like an impressive value stock at the moment.