Financial Contrast: Murphy Oil (NYSE:MUR) versus Devon Energy (NYSE:DVN)

Murphy Oil (NYSE:MUR) and Devon Energy (NYSE:DVN) are both energy companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, valuation, profitability, risk, dividends, earnings and institutional ownership.

Risk & Volatility

Murphy Oil has a beta of 0.5, meaning that its share price is 50% less volatile than the S&P 500. Comparatively, Devon Energy has a beta of 0.37, meaning that its share price is 63% less volatile than the S&P 500.

Valuation and Earnings

This table compares Murphy Oil and Devon Energy”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Murphy Oil	$2.72 billion	1.81	$104.23 million	$0.59	58.03
Devon Energy	$16.54 billion	1.59	$2.64 billion	$3.59	11.76

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

Dividends

Murphy Oil pays an annual dividend of $1.40 per share and has a dividend yield of 4.1%. Devon Energy pays an annual dividend of $1.28 per share and has a dividend yield of 3.0%. Murphy Oil pays out 237.3% 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 35.7% of its earnings in the form of a dividend. Murphy Oil has increased its dividend for 5 consecutive years and Devon Energy has increased its dividend for 1 consecutive years. Murphy Oil is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional & Insider Ownership

78.3% of Murphy Oil shares are held by institutional investors. Comparatively, 69.7% of Devon Energy shares are held by institutional investors. 5.8% of Murphy Oil shares are held by company insiders. Comparatively, 4.6% of Devon Energy shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Murphy Oil	3.02%	3.09%	1.65%
Devon Energy	13.71%	15.22%	7.39%

Analyst Ratings

This is a summary of current ratings and price targets for Murphy Oil and Devon Energy, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Murphy Oil	2	11	3	0	2.06
Devon Energy	0	5	24	2	2.90

Murphy Oil presently has a consensus target price of $37.75, indicating a potential upside of 10.25%. Devon Energy has a consensus target price of $58.44, indicating a potential upside of 38.47%. Given Devon Energy’s stronger consensus rating and higher possible upside, analysts plainly believe Devon Energy is more favorable than Murphy Oil.

Summary

Devon Energy beats Murphy Oil on 11 of the 18 factors compared between the two stocks.

About Murphy Oil

Murphy Oil Corporation, together with its subsidiaries, operates as an oil and gas exploration and production company in the United States, Canada, and internationally. It explores for and produces crude oil, natural gas, and natural gas liquids. The company was formerly known as Murphy Corporation and changed its name to Murphy Oil Corporation in 1964. The company was incorporated in 1950 and is headquartered in Houston, Texas.

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.