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Is Devon Energy (DVN) a Great Value Stock Right Now?

Zacks Equity Research
·2-min read

While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

One company value investors might notice is Devon Energy (DVN). DVN is currently sporting a Zacks Rank of #2 (Buy) and an A for Value.

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Investors should also recognize that DVN has a P/B ratio of 1.05. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 1.89. Within the past 52 weeks, DVN's P/B has been as high as 1.72 and as low as 0.35, with a median of 1.31.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. DVN has a P/S ratio of 0.57. This compares to its industry's average P/S of 0.6.

Value investors will likely look at more than just these metrics, but the above data helps show that Devon Energy is likely undervalued currently. And when considering the strength of its earnings outlook, DVN sticks out at as one of the market's strongest value stocks.


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