Devon Energy (NYSE:DVN) versus Expand Energy (NASDAQ:EXE) Critical Review

Expand Energy (NASDAQ:EXE) and Devon Energy (NYSE:DVN) are both large-cap energy companies, but which is the better stock? We will compare the two companies based on the strength of their earnings, risk, analyst recommendations, profitability, institutional ownership, dividends and valuation.

Dividends

Expand Energy pays an annual dividend of $2.30 per share and has a dividend yield of 2.5%. Devon Energy pays an annual dividend of $1.28 per share and has a dividend yield of 2.6%. Expand Energy pays out 19.9% of its earnings in the form of a dividend. Devon Energy pays out 30.4% 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 has increased its dividend for 1 consecutive years. Devon Energy is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Expand Energy and Devon Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Expand Energy	20.46%	10.33%	6.89%
Devon Energy	16.67%	14.93%	7.91%

Volatility & Risk

Expand Energy has a beta of 0.34, meaning that its share price is 66% less volatile than the S&P 500. Comparatively, Devon Energy has a beta of 0.37, meaning that its share price is 63% less volatile than the S&P 500.

Insider and Institutional Ownership

97.9% of Expand Energy shares are owned by institutional investors. Comparatively, 69.7% of Devon Energy shares are owned by institutional investors. 0.2% of Expand Energy shares are owned by insiders. Comparatively, 4.6% of Devon Energy shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Expand Energy and Devon Energy”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Expand Energy	$13.66 billion	1.58	$1.82 billion	$11.58	8.07
Devon Energy	$19.68 billion	2.78	$2.64 billion	$4.21	11.81

Devon Energy has higher revenue and earnings than Expand Energy. Expand Energy is trading at a lower price-to-earnings ratio than Devon Energy, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Expand Energy and Devon Energy, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Expand Energy	0	6	15	3	2.88
Devon Energy	0	5	23	2	2.90

Expand Energy presently has a consensus target price of $127.42, indicating a potential upside of 36.43%. Devon Energy has a consensus target price of $59.76, indicating a potential upside of 20.18%. Given Expand Energy’s higher probable upside, equities research analysts plainly believe Expand Energy is more favorable than Devon Energy.

Summary

Devon Energy beats Expand Energy on 12 of the 18 factors compared between the two stocks.

About Expand Energy

Expand Energy Corporation is an independent natural gas producer principally in the United States. Expand Energy Corporation, formerly known as Chesapeake Energy Corporation, is based in OKLAHOMA CITY.

About Devon Energy

Devon Energy Corporation, an independent energy company, engages in the exploration, development, and production of oil, natural gas, and natural gas liquids in the United States. It operates in Delaware, Eagle Ford, Anadarko, Williston, and Powder River Basins. The company was founded in 1971 and is headquartered in Oklahoma City, Oklahoma.