Financial Survey: Expand Energy (NASDAQ:EXE) versus Devon Energy (NYSE:DVN)

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

Risk and Volatility

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

Profitability

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

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

Dividends

Devon Energy pays an annual dividend of $1.28 per share and has a dividend yield of 2.6%. Expand Energy pays an annual dividend of $2.30 per share and has a dividend yield of 2.3%. Devon Energy pays out 30.4% of its earnings in the form of a dividend. Expand Energy pays out 19.9% 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 raised 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.

Analyst Ratings

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Devon Energy	0	5	22	2	2.90
Expand Energy	0	6	14	3	2.87

Devon Energy presently has a consensus target price of $59.23, suggesting a potential upside of 22.28%. Expand Energy has a consensus target price of $126.89, suggesting a potential upside of 29.23%. Given Expand Energy’s higher probable upside, analysts clearly believe Expand Energy is more favorable than Devon Energy.

Insider and Institutional Ownership

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

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Devon Energy	$17.19 billion	3.10	$2.64 billion	$4.21	11.51
Expand Energy	$12.12 billion	1.87	$1.82 billion	$11.58	8.48

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.

Summary

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

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.

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.