Cimarex Energy (XEC) vs. Devon Energy Corporation (DVN) Critical Survey
Cimarex Energy (NYSE: XEC) and Devon Energy Corporation (NYSE:DVN) are both large-cap oils/energy companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, profitability, analyst recommendations, institutional ownership, earnings, valuation and risk.
This table compares Cimarex Energy and Devon Energy 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%|
Volatility & Risk
Cimarex Energy has a beta of 1.35, meaning that its share price is 35% more volatile than the S&P 500. Comparatively, Devon Energy Corporation has a beta of 2.21, meaning that its share price is 121% more volatile than the S&P 500.
Earnings and Valuation
This table compares Cimarex Energy and Devon Energy Corporation’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Cimarex Energy||$1.62 billion||6.74||$1.02 billion||$2.66||43.96|
|Devon Energy Corporation||$12.07 billion||1.61||$3.49 billion||$4.39||8.41|
Devon Energy Corporation has higher revenue and earnings than Cimarex Energy. Devon Energy Corporation is trading at a lower price-to-earnings ratio than Cimarex Energy, indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership
90.8% of Cimarex Energy shares are held by institutional investors. Comparatively, 77.3% of Devon Energy Corporation shares are held by institutional investors. 1.7% of Cimarex Energy shares are held by insiders. Comparatively, 0.5% of Devon Energy Corporation shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Cimarex Energy pays an annual dividend of $0.32 per share and has a dividend yield of 0.3%. Devon Energy Corporation pays an annual dividend of $0.24 per share and has a dividend yield of 0.7%. Cimarex Energy pays out 12.0% of its earnings in the form of a dividend. Devon Energy Corporation pays out 5.5% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Devon Energy Corporation is clearly the better dividend stock, given its higher yield and lower payout ratio.
This is a breakdown of recent ratings and price targets for Cimarex Energy and Devon Energy Corporation, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Devon Energy Corporation||0||4||13||0||2.76|
Cimarex Energy presently has a consensus target price of $136.29, indicating a potential upside of 16.55%. Devon Energy Corporation has a consensus target price of $45.44, indicating a potential upside of 23.14%. Given Devon Energy Corporation’s stronger consensus rating and higher probable upside, analysts plainly believe Devon Energy Corporation is more favorable than Cimarex Energy.
Devon Energy Corporation beats Cimarex Energy on 9 of the 16 factors compared between the two stocks.
About Cimarex Energy
Cimarex Energy Co. is an independent oil and gas exploration and production company. The Company operates in exploration and production (E&P) segment. Its operations are located in Oklahoma, Texas and New Mexico. Its E&P activities take place primarily in two areas: the Permian Basin and the Mid-Continent region. Its Permian Basin region encompasses west Texas and southeast New Mexico. Its Mid-Continent region consists of Oklahoma and the Texas Panhandle. As of fiscal year ended December 31, 2016 (fiscal 2016), its activities in the Mid-Continent were focused in the Woodford shale and the Meramec horizon, both in Oklahoma. During fiscal 2016, production from the Mid-Continent averaged 457 millions of cubic feet equivalent (MMcfe) per day, or 47% of total company production. All of the Company’s oil and gas assets are located in the United States. As of December 31, 2016, 63% of its total proved reserves were located in the Mid-Continent region and 37% were in the Permian Basin.
About Devon Energy Corporation
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.
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