For people who do not know, US will soon be an energy-independent country - That is, it does not need to import any oil & gas for its domestic needs. In fact, they can produce more that they have capacity for exports!
Why so? Well, this is thanks to newer technology which have allowed extraction of natural gas and liquids and oil sands etc from what has been almost impossible or too costly to extract, and companies such as Devon Energy (US stock quote DVN) are the beneficiary of such trend...
Company Profile:
Devon Energy Corporation (US stock quote DVN), an independent energy company, is engaged primarily in the exploration, development, and production of oil, natural gas, and natural gas liquids. The company holds interests in various properties located in Anadarko Basin, Barnett Shale, Mississippian-Woodford Trend, Permian Basin, Rockies, and other regions in the United States. It also owns oil and gas properties in Canada. As of December 31, 2013, the company had 701 MMBoe of proved undeveloped reserves. It also operates approximately 24,000 wells. In addition, Devon Energy Corporation offers marketing and midstream services, such as gathering, compression, treating, processing, fractionation, and marketing services to the company and other third parties.
Financials & Outlook:
Last traded = US$75.42
Market Capital = US$30.85B
Current P/E = 18.91
P/S = 2.27
Dividend Yield = 1.27%
Beta = 1.76
Quick ratio = 0.90
Debt/Equity = 0.58
P/B = 1.42
P/Cash = 18.09
P/FCF = -
ROE = 7.8%
Profit Margin = 11.9%
Div Payout ratio = 24.20%
The technicals show strong support at about US$60 (BUT doesn't mean the stock will fall to this price).
DVN Energy started off mainly as a natural gas exploration and production company, but due to the continual suppressed prices of natural gas in US, DVN has started to explore and switch to increase production of natural gas liquids and oil from their sites, which will give them much better margins and profits. DVN has been pretty successful up to now on pursuing this strategy and the management's effort is starting to bear fruit.
I rate DVN as a buy.
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