Stock Evaluation
Company Description: DEVON  9 Jan 2025
Company description: “Devon Energy Corporation is an oil and gas producer in the United States with a multi-basin portfolio. The Company is primarily engaged in the exploration, development and production of oil, natural gas and natural gas liquids (NGLs). Its oil and gas properties include Delaware Basin, Eagle Ford, Anadarko Basin, Williston Basin and Powder River Basin. The Delaware Basin operates in southeast New Mexico and across the state line into west Texas. It offers exploration and development opportunities from many geologic reservoirs and play types, including the oil-rich Wolfcamp, Bone Spring, Avalon and Delaware formations. The Eagle Ford operations are located in Texas' DeWitt and Karnes counties. Its position in the Williston is located entirely on the Fort Berthold Indian Reservation in North Dakota. The Powder River Basin is focused on emerging oil opportunities in Wyoming's Powder River Basin."

Business Valuation Algorithm Criteria in 10 Steps 

Step 1: Marketplace
Is the marketplace/sector expanding? - Yes- Energy (Green Flag)
Is the company’s share of the marketplace expanding?​- Yes
​Does this marketplace have good profit margins?
Yes at 22.00% x $17.0B revenue (Huge Green Flag)

Step 2: Leadership
Does the company display strong leadership, entrepreneurial character and competitiveness?​
Richard E. Muncrief, 66, was appointed to the board of directors
and elected president and chief executive officer of the company in January 2021 (Neutral Flag)

Step 3 Earnings
Have earnings been rising during the last 3 years? 
Yes. (Green Flag)
Are earnings projected to continue to go up this year and next year?
No, earnings have been going down. (Red Flag)

Step 4 Cumulative Earnings
What is the cumulative value of 5 years of earnings shown compared to the stock price? 
86.2% (Big Green Flag)

Step 5 Price to Earnings Ratio
What is the price over earnings? 
6.8 (Big Green Flag for value)
What is the 5 year growth percentage? 
7% (Green Flag )
What is the 5 yr growth % compared to the P/E? 
7% growth vs 6.8 P/E (Neutral Flag)
What is the 5 yr growth % compared to next years growth %? 
7% vs -3% next year growth (Red Flag)

Step 6 Dividends
Is the dividend generous (ie: above 4%)?
6.41% (Huge Green Flag)
Is the dividend easily covered by earnings?
E = 2.5x Div (Green Flag)
Is the stock a dividend aristocrat (ie: dividend growth on a yearly basis over 25 years).
Yes (Green Flag)

Step 7 Global Reach
Does the company sell globally?
Yes - (Green Flag)

Step 8 Directors
Do the directors own more than 10% of the company?
<1% (Neutral Flag)
Are directors adding to their share ownership? 
No.  (Neutral Flag)
Is the company buying back its shares?
No.  (Neutral Flag)

Step 9 Using AI as a tool to confirm a stock information
To Gemini: is Devon a good stock to buy now?

According to some sources, Devon Energy Corporation (DVN) may be a good stock to buy for value investors. However, others say that it may not be a good choice for momentum investors. 
Valuation metrics
Devon Energy's Value Score of A indicates that it may be undervalued. 
Growth prospects
Devon Energy's financial health and growth prospects may indicate that it could outperform the market. 
Analyst ratings
Devon Energy has a "Moderate Buy" rating from analysts. 
Market conditions
Devon Energy's strong revenue performance in the third quarter
may indicate its ability to navigate market conditions. 

Final Thoughts
Devon has an earnings yield of 14.7%, and dividend of 6.41% but it seems stagnant in earnings growth. Based on analysts estimated earnings projections found on LSEG, the price is projected to triple from $31.20 to $102.12 over the next 5 years. This is considered a value buy as its present price is below a discounted 5 year growth rate of 20% to meet that $102.12 target price. It is also considered a Magic Formula buy as its profit margin (22.00%) plus its earnings yield (14.7%) is above 30.

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Algorithm