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Devon or Diamondback Energy: Which Stock Offers Better Value in 2025?
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Key Takeaways
Devon and Diamondback are key U.S. E&P players with strong cash flow and shareholder-focused strategies.
DVN projects modest 2026 EPS growth while FANG expects a decline; DVN also boasts a higher ROE of 21.9%.
DVN trades at a lower EV/EBITDA than FANG and plans higher capex, while FANG trims its 2025 investment.
The companies operating in the Zacks Oil and Gas Exploration and Production – United States industry are vital to the nation’s energy framework. Their activities include identifying underground or offshore oil and gas reserves, drilling wells, and extracting hydrocarbons for processing and distribution. The U.S. stands as a top global producer of oil and natural gas, with major production hubs like the Permian Basin, Eagle Ford, Bakken Formation and the Gulf of America. Innovations such as hydraulic fracturing and horizontal drilling have greatly increased domestic production, lessening reliance on imported energy.
The industry faces mounting environmental challenges, stricter regulations, and growing global momentum toward clean and renewable energy. Volatile commodity prices also influence investment decisions and operational planning. In response, U.S. exploration and production (E&P) companies are focusing on enhancing efficiency, reducing emissions, and adopting sustainable practices to remain competitive and resilient. Amid the given backdrop, let’s focus on companies like Devon Energy Corporation (DVN - Free Report) and Diamondback Energy Inc. (FANG - Free Report) that stand out for their robust operations and strong presence in North America.
Devon Energy is a top-tier U.S. onshore oil and gas producer, recognized for its diversified asset base and prudent capital management. The company consistently delivers robust free cash flow and upholds shareholder-friendly initiatives, such as its variable dividend program and stock repurchases. With a low-cost operating structure, strong balance sheet and emphasis on efficiency, Devon is well-positioned to benefit from ongoing hydrocarbon demand amid global supply challenges and geopolitical uncertainties. Its continued investments in technology and emissions reduction also demonstrate a forward-looking commitment to evolving ESG standards.
Diamondback Energy offers a strong investment case as a low-cost, pure-play operator in the Permian Basin, emphasizing capital discipline and shareholder value. Backed by high-margin assets and operational efficiency, the company consistently produces strong free cash flow. Its strategy of returning capital through base and variable dividends, along with share buybacks, supports long-term value creation. With a healthy balance sheet, strategic acquisitions and a commitment to sustainable development, Diamondback is well-equipped to navigate commodity price volatility while delivering steady growth and attractive returns to investors.
The stocks mentioned above are the key operators in the Oil and Gas Exploration and Production- United States industry space. Let us dive deeper and closely compare the fundamentals of the two stocks to determine which is a better investment option for investors.
DVN & FANG’s Earnings Growth Projections
The Zacks Consensus Estimate for Devon Energy’s earnings indicates a year-over-year decline of 14.11% for 2025 and growth of 2.09% for 2026. Long-term (three to five years) earnings growth per share is pegged at 4.26%.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Diamondback Energy’s earnings indicates a year-over-year decline of 19.19% for 2025 and 12.63% for 2026.
Image Source: Zacks Investment Research
DVN & FANG’s Dividend Yield
Dividends are regular payments made by a company to its shareholders and represent a direct way for investors to earn a return on their investment. They are an important indicator of a company’s financial health and stability, often signaling strong cash flow and consistent earnings.
Currently, the dividend yield for Devon Energy is 2.88%, while that for Diamondback Energy is 2.75%. The dividend yields of both companies are higher than the S&P 500’s yield of 1.46%.
Return on Equity (ROE)
ROE is an essential financial indicator that evaluates a company’s efficiency in generating profits from the equity invested by its shareholders. It demonstrates how well management is utilizing the capital provided to increase earnings and deliver value. DVN’s current ROE is 21.9% compared with FANG’s ROE of 11.22%. Devon is outperforming both the industry’s ROE of 16.74% and FANG’s ROE.
Debt to Capital
Devon Energy’s debt to capital currently stands at 36.24% compared with Diamondback Energy’s debt to capital of 23.74%. DVN’s current ratio at the end of the first quarter of 2025 was 1.08 compared with FANG’s 0.86, which shows Devon Energy has enough liquidity to meet near-term debt obligations.
Valuation
Devon Energy currently appears to be cheaper compared with Diamondback Energy on trailing 12-month Enterprise Value/Earnings before Interest Tax Depreciation and Amortization (EV/EBITDA).
Devon Energy is currently trading at 3.6X, while FANG is trading at 6.84X compared with the industry’s 10.89X.
Image Source: Zacks Investment Research
Capital Expenditure Plan
Capital expenditure is critically important in the oil and gas industry as it drives exploration, development, and maintenance of energy assets essential for long-term production and revenue growth. The companies invest in infrastructure and technology to improve efficiency and reduce environmental impact. The decline in interest rates and the possibility of further decline in interest rates in the second half of this year will be beneficial for the oil and gas companies.
Devon Energy plans to invest in the range of $3.7-$3.9 billion in 2025 and has been making strategic investments to upgrade and expand assets.
Diamondback Energy’s strategic move to cut its 2025 capital budget by $400 million resulted in an annual capital investment in the range of $3.4 - $3.8 billion. The drop in capital expenditure is modestly impacting full-year production, underscoring its ability to navigate downturns efficiently.
Summing Up
Devon has a multi-basin portfolio and focuses on domestic high-margin assets that hold significant long-term growth potential. From its domestically focused assets, Devon Energy gains from established supply chains, lower transportation costs and a stable regulatory environment.
Diamondback Energy is primarily focused on the prolific Permian Basin for its long-term production growth.
Even if both companies carry a Zacks Rank #3 (Hold), our pick for the time being is Devon Energy, given its multi-basin domestic assets, cheaper valuation, higher dividend yield and better ROE, prevails over Diamondback Energy.
Image: Bigstock
Devon or Diamondback Energy: Which Stock Offers Better Value in 2025?
Key Takeaways
The companies operating in the Zacks Oil and Gas Exploration and Production – United States industry are vital to the nation’s energy framework. Their activities include identifying underground or offshore oil and gas reserves, drilling wells, and extracting hydrocarbons for processing and distribution. The U.S. stands as a top global producer of oil and natural gas, with major production hubs like the Permian Basin, Eagle Ford, Bakken Formation and the Gulf of America. Innovations such as hydraulic fracturing and horizontal drilling have greatly increased domestic production, lessening reliance on imported energy.
The industry faces mounting environmental challenges, stricter regulations, and growing global momentum toward clean and renewable energy. Volatile commodity prices also influence investment decisions and operational planning. In response, U.S. exploration and production (E&P) companies are focusing on enhancing efficiency, reducing emissions, and adopting sustainable practices to remain competitive and resilient. Amid the given backdrop, let’s focus on companies like Devon Energy Corporation (DVN - Free Report) and Diamondback Energy Inc. (FANG - Free Report) that stand out for their robust operations and strong presence in North America.
Devon Energy is a top-tier U.S. onshore oil and gas producer, recognized for its diversified asset base and prudent capital management. The company consistently delivers robust free cash flow and upholds shareholder-friendly initiatives, such as its variable dividend program and stock repurchases. With a low-cost operating structure, strong balance sheet and emphasis on efficiency, Devon is well-positioned to benefit from ongoing hydrocarbon demand amid global supply challenges and geopolitical uncertainties. Its continued investments in technology and emissions reduction also demonstrate a forward-looking commitment to evolving ESG standards.
Diamondback Energy offers a strong investment case as a low-cost, pure-play operator in the Permian Basin, emphasizing capital discipline and shareholder value. Backed by high-margin assets and operational efficiency, the company consistently produces strong free cash flow. Its strategy of returning capital through base and variable dividends, along with share buybacks, supports long-term value creation. With a healthy balance sheet, strategic acquisitions and a commitment to sustainable development, Diamondback is well-equipped to navigate commodity price volatility while delivering steady growth and attractive returns to investors.
The stocks mentioned above are the key operators in the Oil and Gas Exploration and Production- United States industry space. Let us dive deeper and closely compare the fundamentals of the two stocks to determine which is a better investment option for investors.
DVN & FANG’s Earnings Growth Projections
The Zacks Consensus Estimate for Devon Energy’s earnings indicates a year-over-year decline of 14.11% for 2025 and growth of 2.09% for 2026. Long-term (three to five years) earnings growth per share is pegged at 4.26%.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Diamondback Energy’s earnings indicates a year-over-year decline of 19.19% for 2025 and 12.63% for 2026.
Image Source: Zacks Investment Research
DVN & FANG’s Dividend Yield
Dividends are regular payments made by a company to its shareholders and represent a direct way for investors to earn a return on their investment. They are an important indicator of a company’s financial health and stability, often signaling strong cash flow and consistent earnings.
Currently, the dividend yield for Devon Energy is 2.88%, while that for Diamondback Energy is 2.75%. The dividend yields of both companies are higher than the S&P 500’s yield of 1.46%.
Return on Equity (ROE)
ROE is an essential financial indicator that evaluates a company’s efficiency in generating profits from the equity invested by its shareholders. It demonstrates how well management is utilizing the capital provided to increase earnings and deliver value. DVN’s current ROE is 21.9% compared with FANG’s ROE of 11.22%. Devon is outperforming both the industry’s ROE of 16.74% and FANG’s ROE.
Debt to Capital
Devon Energy’s debt to capital currently stands at 36.24% compared with Diamondback Energy’s debt to capital of 23.74%. DVN’s current ratio at the end of the first quarter of 2025 was 1.08 compared with FANG’s 0.86, which shows Devon Energy has enough liquidity to meet near-term debt obligations.
Valuation
Devon Energy currently appears to be cheaper compared with Diamondback Energy on trailing 12-month Enterprise Value/Earnings before Interest Tax Depreciation and Amortization (EV/EBITDA).
Devon Energy is currently trading at 3.6X, while FANG is trading at 6.84X compared with the industry’s 10.89X.
Image Source: Zacks Investment Research
Capital Expenditure Plan
Capital expenditure is critically important in the oil and gas industry as it drives exploration, development, and maintenance of energy assets essential for long-term production and revenue growth. The companies invest in infrastructure and technology to improve efficiency and reduce environmental impact. The decline in interest rates and the possibility of further decline in interest rates in the second half of this year will be beneficial for the oil and gas companies.
Devon Energy plans to invest in the range of $3.7-$3.9 billion in 2025 and has been making strategic investments to upgrade and expand assets.
Diamondback Energy’s strategic move to cut its 2025 capital budget by $400 million resulted in an annual capital investment in the range of $3.4 - $3.8 billion. The drop in capital expenditure is modestly impacting full-year production, underscoring its ability to navigate downturns efficiently.
Summing Up
Devon has a multi-basin portfolio and focuses on domestic high-margin assets that hold significant long-term growth potential. From its domestically focused assets, Devon Energy gains from established supply chains, lower transportation costs and a stable regulatory environment.
Diamondback Energy is primarily focused on the prolific Permian Basin for its long-term production growth.
Even if both companies carry a Zacks Rank #3 (Hold), our pick for the time being is Devon Energy, given its multi-basin domestic assets, cheaper valuation, higher dividend yield and better ROE, prevails over Diamondback Energy.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.