Financial Analysis: Devon Energy (NYSE:DVN) & Legacy Reserves (OTCMKTS:LGCYQ)

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

Insider and Institutional Ownership

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

Earnings and Valuation

This table compares Devon Energy and Legacy Reserves”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Devon Energy	$15.94 billion	1.38	$2.89 billion	$4.46	7.80
Legacy Reserves	N/A	N/A	N/A	N/A	N/A

Devon Energy has higher revenue and earnings than Legacy Reserves.

Profitability

This table compares Devon Energy and Legacy Reserves’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Devon Energy	16.57%	18.59%	8.95%
Legacy Reserves	N/A	N/A	N/A

Analyst Ratings

This is a summary of recent recommendations for Devon Energy and Legacy Reserves, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Devon Energy	0	10	16	0	2.62
Legacy Reserves	0	0	0	0	0.00

Devon Energy currently has a consensus price target of $44.15, indicating a potential upside of 26.99%. Given Devon Energy’s stronger consensus rating and higher probable upside, equities analysts plainly believe Devon Energy is more favorable than Legacy Reserves.

Summary

Devon Energy beats Legacy Reserves on 8 of the 9 factors compared between the two stocks.

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.

About Legacy Reserves

Legacy Reserves Inc., an independent energy company, engages in the acquisition, development, and production of oil and natural gas properties in the United States. It focuses on the horizontal development of unconventional plays in the Permian Basin and the management of shallow-decline oil and natural gas wells in the regions of Permian Basin, East Texas, Rocky Mountain, and Mid-Continent. As of December 31, 2018, the company had proved reserves of approximately 164.9 million barrels of crude oil equivalent covering natural gas, as well as oil and natural gas liquids. Legacy Reserves Inc. was founded in 2005 and is based in Midland, Texas. On June 18, 2019, Legacy Reserves Inc., along with its affiliates, filed a voluntary petition for reorganization under Chapter 11 in the U.S. Bankruptcy Court for the Southern District of Texas.