Scorpio Tankers (NYSE:STNG) and Devon Energy (NYSE:DVN) Critical Analysis

Scorpio Tankers (NYSE:STNG) and Devon Energy (NYSE:DVN) are both energy companies, but which is the superior business? We will compare the two businesses based on the strength of their risk, institutional ownership, dividends, valuation, earnings, profitability and analyst recommendations.

Volatility and Risk

Scorpio Tankers has a beta of -0.17, suggesting that its stock price is 117% less volatile than the S&P 500. Comparatively, Devon Energy has a beta of 0.49, suggesting that its stock price is 51% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings for Scorpio Tankers and Devon Energy, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Scorpio Tankers	1	5	5	0	2.36
Devon Energy	0	3	25	2	2.97

Scorpio Tankers presently has a consensus price target of $92.14, suggesting a potential upside of 11.14%. Devon Energy has a consensus price target of $60.84, suggesting a potential upside of 23.49%. Given Devon Energy’s stronger consensus rating and higher probable upside, analysts plainly believe Devon Energy is more favorable than Scorpio Tankers.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Scorpio Tankers	$1.22 billion	3.44	$344.29 million	$16.01	5.18
Devon Energy	$19.68 billion	2.75	$2.64 billion	$4.21	11.70

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

Dividends

Scorpio Tankers pays an annual dividend of $1.80 per share and has a dividend yield of 2.2%. Devon Energy pays an annual dividend of $1.28 per share and has a dividend yield of 2.6%. Scorpio Tankers pays out 11.2% of its earnings in the form of a dividend. Devon Energy pays out 30.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Scorpio Tankers has raised its dividend for 2 consecutive years and Devon Energy has raised its dividend for 1 consecutive years.

Insider and Institutional Ownership

54.6% of Scorpio Tankers shares are owned by institutional investors. Comparatively, 69.7% of Devon Energy shares are owned by institutional investors. 7.3% of Scorpio Tankers shares are owned by company insiders. Comparatively, 4.6% of Devon Energy shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Scorpio Tankers	67.16%	16.43%	13.14%
Devon Energy	16.67%	14.93%	7.91%

Summary

Devon Energy beats Scorpio Tankers on 10 of the 18 factors compared between the two stocks.

About Scorpio Tankers

Scorpio Tankers Inc., together with its subsidiaries, engages in the seaborne transportation of crude oi and refined petroleum products in the shipping markets worldwide. As of March 21, 2024, its fleet consisted of 110 owned and leases financed tanker, including 39 LR2, 57 MR, and 14 Handymax with a weighted average age of approximately 8.1 years. Scorpio Tankers Inc. was incorporated in 2009 and is headquartered in Monaco.

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.