Financial Analysis: Devon Energy (NYSE:DVN) versus Birchcliff Energy (OTCMKTS:BIREF)

Birchcliff Energy (OTCMKTS:BIREF) and Devon Energy (NYSE:DVN) are both oils/energy companies, but which is the superior business? We will contrast the two companies based on the strength of their earnings, dividends, analyst recommendations, profitability, risk, institutional ownership and valuation.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Birchcliff Energy and Devon Energy, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Birchcliff Energy	0	2	0	0	2.00
Devon Energy	0	9	14	0	2.61

Devon Energy has a consensus target price of $52.15, indicating a potential upside of 31.86%. Given Devon Energy’s stronger consensus rating and higher probable upside, analysts plainly believe Devon Energy is more favorable than Birchcliff Energy.

Dividends

Birchcliff Energy pays an annual dividend of $0.29 per share and has a dividend yield of 7.9%. Devon Energy pays an annual dividend of $0.88 per share and has a dividend yield of 2.2%. Birchcliff Energy pays out 263.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Devon Energy pays out 16.0% of its earnings in the form of a dividend.

Risk and Volatility

Birchcliff Energy has a beta of 0.64, meaning that its stock price is 36% less volatile than the S&P 500. Comparatively, Devon Energy has a beta of 2.03, meaning that its stock price is 103% more volatile than the S&P 500.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Birchcliff Energy	$548.41 million	1.81	$7.24 million	$0.11	33.55
Devon Energy	$15.26 billion	1.62	$3.75 billion	$5.51	7.18

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Birchcliff Energy	6.05%	1.82%	1.27%
Devon Energy	22.60%	29.14%	14.46%

Insider & Institutional Ownership

0.8% of Birchcliff Energy shares are owned by institutional investors. Comparatively, 69.7% of Devon Energy shares are owned by institutional investors. 1.5% of Birchcliff Energy shares are owned by insiders. Comparatively, 0.7% of Devon Energy shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Summary

Devon Energy beats Birchcliff Energy on 12 of the 16 factors compared between the two stocks.

About Birchcliff Energy

Birchcliff Energy Ltd., an intermediate oil and natural gas company, explores for, develops, and produces natural gas, light oil, condensate, and other natural gas liquids in Western Canada. The company holds interests in the areas of Montney/Doig Resource Play, including the Pouce Coupe and Gordondale properties in Alberta. Birchcliff Energy Ltd. was founded in 2004 and is headquartered in Calgary, Canada.

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.