Devon Energy Corporation (NYSE: DVN) and Noble Energy (NYSE:NBL) are both large-cap oils/energy companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, risk, valuation, dividends, earnings, profitability and institutional ownership.

Profitability

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

Net Margins Return on Equity Return on Assets
Devon Energy Corporation 11.62% 6.88% 2.88%
Noble Energy -45.85% 1.06% 0.49%

Volatility and Risk

Devon Energy Corporation has a beta of 2.22, suggesting that its share price is 122% more volatile than the S&P 500. Comparatively, Noble Energy has a beta of 1.18, suggesting that its share price is 18% more volatile than the S&P 500.

Earnings & Valuation

This table compares Devon Energy Corporation and Noble Energy’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Devon Energy Corporation $12.20 billion 1.64 -$3.30 billion $2.93 12.97
Noble Energy $3.49 billion 3.61 -$998.00 million ($3.99) -6.49

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

Dividends

Devon Energy Corporation pays an annual dividend of $0.24 per share and has a dividend yield of 0.6%. Noble Energy pays an annual dividend of $0.40 per share and has a dividend yield of 1.5%. Devon Energy Corporation pays out 8.2% of its earnings in the form of a dividend. Noble Energy pays out -10.0% 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. Noble Energy is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Devon Energy Corporation and Noble Energy, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Devon Energy Corporation 0 4 14 0 2.78
Noble Energy 0 4 17 0 2.81

Devon Energy Corporation presently has a consensus price target of $46.06, suggesting a potential upside of 21.24%. Noble Energy has a consensus price target of $40.45, suggesting a potential upside of 56.30%. Given Noble Energy’s stronger consensus rating and higher possible upside, analysts clearly believe Noble Energy is more favorable than Devon Energy Corporation.

Institutional & Insider Ownership

77.1% of Devon Energy Corporation shares are owned by institutional investors. Comparatively, 91.0% of Noble Energy shares are owned by institutional investors. 0.5% of Devon Energy Corporation shares are owned by insiders. Comparatively, 2.3% of Noble Energy shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Summary

Noble Energy beats Devon Energy Corporation on 10 of the 16 factors compared between the two stocks.

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.

About Noble Energy

Noble Energy, Inc. is an independent energy company. The Company is engaged in crude oil, natural gas and natural gas and natural gas liquids (NGLs) exploration, development, production and acquisition. The Company’s segments include: United States, including the onshore DJ Basin, Permian Basin, Eagle Ford Shale, Marcellus Shale and offshore deepwater Gulf of Mexico, as well as the consolidated accounts of Noble Midstream Partners LP (Noble Midstream Partners); Eastern Mediterranean, including offshore Israel and Cyprus; West Africa, including offshore Equatorial Guinea, Cameroon and Gabon, and Other International and Corporate, including new ventures, such as offshore the Falkland Islands, Suriname and Newfoundland. The Company’s portfolio of assets is diversified through the United States and international projects and production mix among crude oil, natural gas and NGLs. Its business focuses on both the United States unconventional basins and certain global conventional basins.

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