Critical Review: EQT Corporation (EQT) & Devon Energy Corporation (DVN)
Devon Energy Corporation (NYSE: DVN) and EQT Corporation (NYSE:EQT) are both large-cap oils/energy companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, earnings, profitability, risk, analyst recommendations, valuation and dividends.
Insider & Institutional Ownership
77.0% of Devon Energy Corporation shares are owned by institutional investors. Comparatively, 90.5% of EQT Corporation shares are owned by institutional investors. 0.5% of Devon Energy Corporation shares are owned by company insiders. Comparatively, 1.0% of EQT Corporation shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
Devon Energy Corporation pays an annual dividend of $0.24 per share and has a dividend yield of 0.7%. EQT Corporation pays an annual dividend of $0.12 per share and has a dividend yield of 0.2%. Devon Energy Corporation pays out 5.5% of its earnings in the form of a dividend. EQT Corporation pays out 400.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Devon Energy Corporation is clearly the better dividend stock, given its higher yield and lower payout ratio.
This is a summary of recent ratings and price targets for Devon Energy Corporation and EQT Corporation, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Devon Energy Corporation||0||4||13||0||2.76|
Devon Energy Corporation currently has a consensus price target of $45.44, indicating a potential upside of 31.13%. EQT Corporation has a consensus price target of $79.82, indicating a potential upside of 26.76%. Given Devon Energy Corporation’s stronger consensus rating and higher possible upside, analysts plainly believe Devon Energy Corporation is more favorable than EQT Corporation.
Valuation and Earnings
This table compares Devon Energy Corporation and EQT Corporation’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Devon Energy Corporation||$12.07 billion||1.51||$3.49 billion||$4.39||7.89|
|EQT Corporation||$2.46 billion||4.44||$1.53 billion||$0.03||2,099.70|
Devon Energy Corporation has higher revenue and earnings than EQT Corporation. Devon Energy Corporation is trading at a lower price-to-earnings ratio than EQT Corporation, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
Devon Energy Corporation has a beta of 2.21, suggesting that its stock price is 121% more volatile than the S&P 500. Comparatively, EQT Corporation has a beta of 0.77, suggesting that its stock price is 23% less volatile than the S&P 500.
This table compares Devon Energy Corporation and EQT Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Devon Energy Corporation||16.07%||5.36%||2.17%|
Devon Energy Corporation beats EQT Corporation on 12 of the 16 factors compared between the two stocks.
Devon Energy Corporation Company Profile
Devon Energy Corporation is an independent energy company. The Company also controls EnLink Midstream Partners, L.P. (EnLink). The Company’s segments include U.S., Canada and EnLink. The Company is engaged primarily in the exploration, development and production of oil, natural gas and natural gas liquids (NGLs). The Company’s operations are concentrated in various North American onshore areas in the United States and Canada. The Company’s U.S. and Canada segments are primarily engaged in oil and gas exploration and production activities. EnLink is a master limited partnership (MLP) with a midstream business and operations located across the United States. EnLink focuses on providing gathering, transmission, processing, storage, fractionation and marketing to upstream oil and natural gas producers. The Company’s properties include Barnett Shale, Delaware Basin, Eagle Ford, Heavy Oil, Rockies Oil and STACK.
EQT Corporation Company Profile
EQT Corporation is a natural gas company. The Company operates through three segments: EQT Production, EQT Gathering and EQT Transmission. The EQT Production segment includes its exploration for, and development and production of, natural gas, natural gas liquids and a limited amount of crude oil, primarily in the Appalachian Basin. The EQT Production segment also includes the marketing activities of the Company. EQT Production’s properties are located in Pennsylvania, West Virginia, Kentucky and Virginia. The operations of EQT Gathering include the natural gas gathering activities of the Company, consisting solely of assets that are owned and operated by EQT Midstream Partners, LP (EQM). The operations of EQT Transmission include the natural gas transmission and storage activities of the Company, consisting solely of assets that are owned and operated by EQM. EQT Transmission focuses on various transmission projects, including Mountain Valley Pipeline and Transmission Expansion.
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