DVN's FWD P/E valuations of 9.02x and FWD Price/ Cash Flow valuations of 4.45x remain discounted compared to its oil/ gas peers, such as Exxon Mobil (XOM) at 12.19x/ 7.77x, Chevron Corporation (CVX) at 12.20x/ 7.27x, and Occidental Petroleum (OXY) at 16.15x/ 5x, respectively.

While DVN has admittedly failed to close multiple acquisitions over the last twelve months, we concur with the management's "price discipline as an acquirer," since it allows the company to avoid paying the premium observed during the sector's consolidation party thus far.

seekingalpha.com - Devons undervaluation remains a boon as management executes brilliantly reiterate buy

Currently, Devon Energy can use the large cash flows produced by the higher energy prices to repurchase shares after paying solid dividends. Historically, oil companies have only focused on paying large fixed dividends and the energy companies have even shifted capital returns to paying variable dividends to restrict the amount tied to dividends.

The diluted share count is down to only 632 million shares from 647 million for Q1 '23. Devon has reduced the share count by 15 million over the last year while still paying a fixed dividend of $0.22, equivalent to a yield of 1.8% with a variable dividend of $0.13 pushing the annualized dividend yield to 2.8%.

seekingalpha.com - Devon energy discipline paying off

Does anyone here own Devon or looked into buying it? I like their capital allocation and acquisition discipline. It is very unusual for a US company to have a variable dividend policy (much more common in Europe), so it is not being rewarded for their policy of returning 70% of cash flow. It makes sense to prioritize share purchases over increasing dividends at these share prices.