Common Stock Valuation Ratios (Price Multiples)
Valuation ratios measure the quantity of an asset or flaw (e.g., earnings) associated with ownership of a specified claim (e.g., a share of ownership of the enterprise).
Current Valuation Ratios
Devon Energy Corp., current price multiples
| Devon Energy Corp. | Chevron Corp. | ConocoPhillips | Exxon Mobil Corp. | Oil, Gas & Consumable Fuels | Energy | ||||
|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||||
| Current share price (P) | $44.18 | ||||||||
| No. shares of common stock outstanding | 640,700,000 | ||||||||
| Growth rate (g) | 3.93% | ||||||||
| Earnings per share (EPS) | $9.39 | ||||||||
| Next year expected EPS | $9.76 | ||||||||
| Operating profit per share | $12.62 | ||||||||
| Sales per share | $29.92 | ||||||||
| Book value per share (BVPS) | $17.43 | ||||||||
| Valuation Ratios (Price Multiples) | |||||||||
| Price to earnings (P/E) | 4.71 | 32.96 | 19.53 | 23.39 | 11.25 | 11.53 | |||
| Price to next year expected earnings | 4.53 | 31.52 | 17.41 | 21.58 | 10.13 | 10.39 | |||
| Price-earnings-growth (PEG) | 1.20 | 7.23 | 1.60 | 2.80 | 1.02 | 1.05 | |||
| Price to operating profit (P/OP) | 3.50 | 19.05 | 11.52 | 15.96 | 7.80 | 8.04 | |||
| Price to sales (P/S) | 1.48 | 2.20 | 2.65 | 2.08 | 1.73 | 1.76 | |||
| Price to book value (P/BV) | 2.53 | 2.17 | 2.42 | 2.60 | 3.07 | 3.11 | |||
Based on: 10-K (reporting date: 2022-12-31).
If the company price multiple is lower then the price multiple of benchmark then company stock is relatively undervalued.
Otherwise, if the company price multiple is higher then the price multiple of benchmark then company stock is relatively overvalued.
Historical Valuation Ratios (Summary)
Devon Energy Corp., historical price multiples
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
The valuation multiples between 2018 and 2022 exhibit significant volatility, characterized by a period of extreme expansion in 2020 and 2021 followed by a contraction in 2022. The absence of certain earnings-based metrics in 2019 and 2020 suggests periods of negative net income or operating instability.
- Price to Earnings (P/E) Ratio
- A substantial increase in the P/E ratio is observed from 4.33 in 2018 to a peak of 12.71 in 2021. This was followed by a sharp correction in 2022, where the ratio fell to 6.22, indicating a compression in the multiple the market was willing to pay for each dollar of earnings.
- Price to Operating Profit (P/OP) Ratio
- The P/OP ratio demonstrated extreme variance, spiking to 61.70 in 2019, which indicates a severe contraction in operating profits relative to the share price. A strong recovery trend followed, with the ratio normalizing to 11.08 in 2021 and further decreasing to 4.63 in 2022, reflecting significantly improved operating efficiency or a reduction in market valuation.
- Price to Sales (P/S) Ratio
- A steady upward trend is noted from 2018 to 2020, with the ratio rising from 1.24 to a peak of 3.03. This suggests an increase in the premium attributed to revenue generation during this period. A subsequent decline occurred over the next two years, resulting in a ratio of 1.95 by the end of 2022.
- Price to Book Value (P/BV) Ratio
- The P/BV ratio remained relatively stable between 2018 and 2019, ranging from 1.44 to 1.50. A significant jump occurred in 2020, reaching 5.07, marking a peak in the market valuation relative to the company's equity base. A gradual downward trend was observed thereafter, with the ratio settling at 3.35 in 2022.
Overall, the data indicates a cyclical pattern where valuation multiples expanded aggressively around 2020, particularly in terms of book value and sales, before undergoing a broad contraction by 2022. The divergence between the P/OP and P/E trends suggests that operating profitability recovered more aggressively than the overall market price multiple.
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Price to Earnings (P/E)
Devon Energy Corp., historical P/E calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 654,000,000 | 664,200,000 | 673,100,000 | 382,900,000 | 438,300,000 | |
| Selected Financial Data (US$) | ||||||
| Net earnings (loss) attributable to Devon (in millions) | 6,015) | 2,813) | (2,680) | (355) | 3,064) | |
| Earnings per share (EPS)2 | 9.20 | 4.24 | -3.98 | -0.93 | 6.99 | |
| Share price1, 3 | 57.23 | 53.85 | 21.73 | 22.72 | 30.27 | |
| Valuation Ratio | ||||||
| P/E ratio4 | 6.22 | 12.71 | — | — | 4.33 | |
| Benchmarks | ||||||
| P/E Ratio, Competitors5 | ||||||
| Chevron Corp. | 8.71 | 16.81 | — | — | — | |
| ConocoPhillips | 7.07 | 14.66 | — | — | — | |
| Exxon Mobil Corp. | 8.01 | 14.11 | — | — | — | |
| P/E Ratio, Sector | ||||||
| Oil, Gas & Consumable Fuels | 8.08 | 15.11 | — | — | — | |
| P/E Ratio, Industry | ||||||
| Energy | 8.54 | 15.67 | — | — | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 Data adjusted for splits and stock dividends.
2 2022 Calculation
EPS = Net earnings (loss) attributable to Devon ÷ No. shares of common stock outstanding
= 6,015,000,000 ÷ 654,000,000 = 9.20
3 Closing price as at the filing date of Devon Energy Corp. Annual Report.
4 2022 Calculation
P/E ratio = Share price ÷ EPS
= 57.23 ÷ 9.20 = 6.22
5 Click competitor name to see calculations.
An analysis of the financial metrics from 2018 to 2022 indicates a period of significant volatility followed by a robust recovery in both market valuation and profitability.
- Share Price Trends
- The share price experienced a decline between 2018 and 2020, reaching a low of 21.73. This was followed by a substantial increase in 2021, where the price more than doubled to 53.85, continuing a modest upward trajectory to close at 57.23 in 2022.
- Earnings per Share (EPS) Performance
- Profitability shifted from a positive 6.99 in 2018 to negative values in 2019 and 2020, with the lowest point occurring in 2020 at -3.98. A strong reversal occurred in 2021 as earnings returned to positive territory at 4.24, further accelerating to a period high of 9.20 by the end of 2022.
- Price-to-Earnings (P/E) Ratio Dynamics
- The P/E ratio was not applicable for 2019 and 2020 due to negative earnings. In 2018, the ratio stood at 4.33, reflecting a low valuation multiple. This multiple expanded significantly to 12.71 in 2021, suggesting that the share price recovery initially outpaced the recovery in earnings. By 2022, the P/E ratio compressed to 6.22, as the growth in earnings per share accelerated more rapidly than the increase in share price.
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Price to Operating Profit (P/OP)
Devon Energy Corp., historical P/OP calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 654,000,000 | 664,200,000 | 673,100,000 | 382,900,000 | 438,300,000 | |
| Selected Financial Data (US$) | ||||||
| Operating income (loss) (in millions) | 8,084) | 3,227) | (2,820) | 141) | 1,514) | |
| Operating profit per share2 | 12.36 | 4.86 | -4.19 | 0.37 | 3.45 | |
| Share price1, 3 | 57.23 | 53.85 | 21.73 | 22.72 | 30.27 | |
| Valuation Ratio | ||||||
| P/OP ratio4 | 4.63 | 11.08 | — | 61.70 | 8.76 | |
| Benchmarks | ||||||
| P/OP Ratio, Competitors5 | ||||||
| Chevron Corp. | 6.12 | 11.40 | — | — | — | |
| ConocoPhillips | 4.57 | 8.66 | — | — | — | |
| Exxon Mobil Corp. | 5.65 | 9.86 | — | — | — | |
| P/OP Ratio, Sector | ||||||
| Oil, Gas & Consumable Fuels | 5.60 | 10.13 | — | — | — | |
| P/OP Ratio, Industry | ||||||
| Energy | 5.95 | 10.52 | — | — | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 Data adjusted for splits and stock dividends.
2 2022 Calculation
Operating profit per share = Operating income (loss) ÷ No. shares of common stock outstanding
= 8,084,000,000 ÷ 654,000,000 = 12.36
3 Closing price as at the filing date of Devon Energy Corp. Annual Report.
4 2022 Calculation
P/OP ratio = Share price ÷ Operating profit per share
= 57.23 ÷ 12.36 = 4.63
5 Click competitor name to see calculations.
The valuation of common stock based on operating profit exhibits significant volatility between 2018 and 2022, characterized by a period of extreme earnings contraction followed by a substantial recovery.
- Share Price Trends
- A downward trajectory was observed from 2018 to 2020, with the share price declining from 30.27 USD to a low of 21.73 USD. This was followed by a sharp appreciation in 2021, reaching 53.85 USD, and further increasing to 57.23 USD by the end of 2022.
- Operating Profit per Share Performance
- Operating profit per share experienced a severe decline, falling from 3.45 USD in 2018 to 0.37 USD in 2019, and reaching a negative value of -4.19 USD in 2020. A strong recovery occurred in 2021 with a return to profitability at 4.86 USD, culminating in a peak of 12.36 USD in 2022.
- Price to Operating Profit (P/OP) Ratio Analysis
- The P/OP ratio demonstrates an inverse relationship between profit margins and valuation multiples during the period of instability. The ratio spiked to 61.70 in 2019 as operating profits plummeted while the share price remained relatively higher. In 2020, the ratio became non-calculable due to negative operating profit.
- Following the recovery in 2021, the ratio normalized to 11.08. By 2022, despite the share price reaching its five-year peak, the P/OP ratio contracted to its lowest point of 4.63. This indicates that the growth in operating profit per share significantly outpaced the increase in share price, leading to a more compressed valuation multiple.
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Price to Sales (P/S)
Devon Energy Corp., historical P/S calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 654,000,000 | 664,200,000 | 673,100,000 | 382,900,000 | 438,300,000 | |
| Selected Financial Data (US$) | ||||||
| Revenues (in millions) | 19,169) | 12,206) | 4,828) | 6,220) | 10,734) | |
| Sales per share2 | 29.31 | 18.38 | 7.17 | 16.24 | 24.49 | |
| Share price1, 3 | 57.23 | 53.85 | 21.73 | 22.72 | 30.27 | |
| Valuation Ratio | ||||||
| P/S ratio4 | 1.95 | 2.93 | 3.03 | 1.40 | 1.24 | |
| Benchmarks | ||||||
| P/S Ratio, Competitors5 | ||||||
| Chevron Corp. | 1.31 | 1.69 | — | — | — | |
| ConocoPhillips | 1.68 | 2.58 | — | — | — | |
| Exxon Mobil Corp. | 1.12 | 1.17 | — | — | — | |
| P/S Ratio, Sector | ||||||
| Oil, Gas & Consumable Fuels | 1.24 | 1.48 | — | — | — | |
| P/S Ratio, Industry | ||||||
| Energy | 1.31 | 1.52 | — | — | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 Data adjusted for splits and stock dividends.
2 2022 Calculation
Sales per share = Revenues ÷ No. shares of common stock outstanding
= 19,169,000,000 ÷ 654,000,000 = 29.31
3 Closing price as at the filing date of Devon Energy Corp. Annual Report.
4 2022 Calculation
P/S ratio = Share price ÷ Sales per share
= 57.23 ÷ 29.31 = 1.95
5 Click competitor name to see calculations.
The analysis of price multiples between 2018 and 2022 reveals a period of significant volatility in both equity valuation and top-line revenue generation, characterized by an inverse relationship between revenue performance and the price-to-sales multiple during the middle of the period.
- Price to Sales (P/S) Ratio Dynamics
- The P/S ratio exhibited a non-linear trajectory, increasing from 1.24 in 2018 to a peak of 3.03 in 2020, before contracting to 1.95 by the end of 2022. The expansion of the multiple during the 2019-2020 period suggests that the market maintained a higher relative valuation of the company despite a substantial decline in underlying sales.
- Revenue Performance per Share
- Sales per share experienced a severe contraction from 24.49 in 2018 to a period low of 7.17 in 2020. A robust recovery followed, with sales per share increasing to 18.38 in 2021 and reaching a five-year high of 29.31 in 2022. This indicates a significant recovery in revenue-generating capacity relative to the number of shares outstanding.
- Correlation Between Share Price and Valuation
- A notable divergence is observed in 2020, where the valuation multiple reached its maximum while sales per share reached their minimum. Between 2021 and 2022, a transition occurred; although the share price surged from 21.73 to 57.23, the acceleration of sales per share outpaced the price growth, leading to a compression of the P/S ratio from 2.93 to 1.95.
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Price to Book Value (P/BV)
Devon Energy Corp., historical P/BV calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 654,000,000 | 664,200,000 | 673,100,000 | 382,900,000 | 438,300,000 | |
| Selected Financial Data (US$) | ||||||
| Stockholders’ equity attributable to Devon (in millions) | 11,167) | 9,262) | 2,885) | 5,802) | 9,186) | |
| Book value per share (BVPS)2 | 17.07 | 13.94 | 4.29 | 15.15 | 20.96 | |
| Share price1, 3 | 57.23 | 53.85 | 21.73 | 22.72 | 30.27 | |
| Valuation Ratio | ||||||
| P/BV ratio4 | 3.35 | 3.86 | 5.07 | 1.50 | 1.44 | |
| Benchmarks | ||||||
| P/BV Ratio, Competitors5 | ||||||
| Chevron Corp. | 1.94 | 1.89 | — | — | — | |
| ConocoPhillips | 2.75 | 2.61 | — | — | — | |
| Exxon Mobil Corp. | 2.29 | 1.93 | — | — | — | |
| P/BV Ratio, Sector | ||||||
| Oil, Gas & Consumable Fuels | 2.21 | 2.00 | — | — | — | |
| P/BV Ratio, Industry | ||||||
| Energy | 2.30 | 2.07 | — | — | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 Data adjusted for splits and stock dividends.
2 2022 Calculation
BVPS = Stockholders’ equity attributable to Devon ÷ No. shares of common stock outstanding
= 11,167,000,000 ÷ 654,000,000 = 17.07
3 Closing price as at the filing date of Devon Energy Corp. Annual Report.
4 2022 Calculation
P/BV ratio = Share price ÷ BVPS
= 57.23 ÷ 17.07 = 3.35
5 Click competitor name to see calculations.
The valuation metrics from 2018 through 2022 reveal a period of significant volatility in the Price to Book Value (P/BV) ratio, characterized by an extreme spike in 2020 followed by a gradual trend toward normalization.
- Price to Book Value (P/BV) Ratio Trends
- The P/BV ratio remained relatively stable between 2018 and 2019, moving slightly from 1.44 to 1.50. A sharp escalation occurred in 2020, with the ratio peaking at 5.07. Subsequent years showed a consistent decline, as the ratio moderated to 3.86 in 2021 and further to 3.35 by the end of 2022.
- Book Value per Share (BVPS) Volatility
- A severe contraction in book value is observed between 2019 and 2020, where BVPS plummeted from 15.15 to 4.29. This substantial decrease in the denominator served as the primary driver for the 2020 P/BV spike. A recovery phase followed, with BVPS rising to 13.94 in 2021 and reaching 17.07 by the end of 2022.
- Share Price Influence
- The share price experienced a downward trend from 30.27 in 2018 to a low of 21.73 in 2020. However, a strong bullish reversal occurred in 2021, with the price jumping to 53.85 and ending 2022 at 57.23. While the market price increased substantially in the final two years, the simultaneous recovery of the book value prevented the P/BV ratio from remaining at its 2020 peak, leading to a gradual compression of the multiple.
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