Intrinsic value of Devon Energy - DVN

Previous Close

$39.87

  Intrinsic Value

$35.39

stock screener

  Rating & Target

hold

-11%

Previous close

$39.87

 
Intrinsic value

$35.39

 
Up/down potential

-11%

 
Rating

hold

We calculate the intrinsic value of DVN stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 0001), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 20.3

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  3.90
  4.01
  4.11
  4.20
  4.28
  4.35
  4.42
  4.47
  4.53
  4.57
  4.62
  4.65
  4.69
  4.72
  4.75
  4.77
  4.80
  4.82
  4.83
  4.85
  4.87
  4.88
  4.89
  4.90
  4.91
  4.92
  4.93
  4.94
  4.94
  4.95
Revenue, $m
  14,493
  15,074
  15,694
  16,352
  17,052
  17,794
  18,580
  19,411
  20,289
  21,217
  22,197
  23,230
  24,319
  25,467
  26,677
  27,950
  29,291
  30,701
  32,186
  33,747
  35,390
  37,116
  38,932
  40,841
  42,847
  44,955
  47,171
  49,500
  51,946
  54,516
Variable operating expenses, $m
  7,316
  7,606
  7,915
  8,243
  8,593
  8,963
  9,355
  9,770
  10,208
  10,671
  11,076
  11,591
  12,135
  12,707
  13,311
  13,946
  14,615
  15,319
  16,060
  16,839
  17,658
  18,520
  19,426
  20,378
  21,379
  22,431
  23,537
  24,699
  25,920
  27,202
Fixed operating expenses, $m
  5,755
  5,881
  6,011
  6,143
  6,278
  6,416
  6,558
  6,702
  6,849
  7,000
  7,154
  7,311
  7,472
  7,637
  7,805
  7,976
  8,152
  8,331
  8,514
  8,702
  8,893
  9,089
  9,289
  9,493
  9,702
  9,915
  10,134
  10,356
  10,584
  10,817
Total operating expenses, $m
  13,071
  13,487
  13,926
  14,386
  14,871
  15,379
  15,913
  16,472
  17,057
  17,671
  18,230
  18,902
  19,607
  20,344
  21,116
  21,922
  22,767
  23,650
  24,574
  25,541
  26,551
  27,609
  28,715
  29,871
  31,081
  32,346
  33,671
  35,055
  36,504
  38,019
Operating income, $m
  1,422
  1,587
  1,768
  1,966
  2,181
  2,415
  2,667
  2,939
  3,232
  3,546
  3,967
  4,328
  4,713
  5,123
  5,561
  6,028
  6,524
  7,051
  7,612
  8,207
  8,838
  9,508
  10,217
  10,969
  11,766
  12,609
  13,501
  14,444
  15,442
  16,497
EBITDA, $m
  3,581
  3,829
  4,099
  4,391
  4,706
  5,046
  5,411
  5,802
  6,221
  6,668
  7,145
  7,653
  8,194
  8,769
  9,380
  10,029
  10,717
  11,446
  12,219
  13,038
  13,904
  14,821
  15,791
  16,816
  17,899
  19,044
  20,253
  21,530
  22,878
  24,301
Interest expense (income), $m
  566
  405
  454
  506
  561
  619
  681
  747
  817
  891
  969
  1,051
  1,138
  1,230
  1,327
  1,429
  1,536
  1,649
  1,768
  1,894
  2,025
  2,164
  2,310
  2,463
  2,625
  2,794
  2,972
  3,160
  3,356
  3,563
  3,781
Earnings before tax, $m
  1,017
  1,133
  1,262
  1,405
  1,562
  1,733
  1,920
  2,122
  2,341
  2,578
  2,916
  3,189
  3,483
  3,797
  4,132
  4,491
  4,874
  5,283
  5,718
  6,181
  6,674
  7,198
  7,754
  8,345
  8,971
  9,636
  10,341
  11,088
  11,879
  12,717
Tax expense, $m
  275
  306
  341
  379
  422
  468
  518
  573
  632
  696
  787
  861
  940
  1,025
  1,116
  1,213
  1,316
  1,426
  1,544
  1,669
  1,802
  1,943
  2,094
  2,253
  2,422
  2,602
  2,792
  2,994
  3,207
  3,433
Net income, $m
  743
  827
  921
  1,026
  1,140
  1,265
  1,402
  1,549
  1,709
  1,882
  2,129
  2,328
  2,542
  2,771
  3,017
  3,279
  3,558
  3,857
  4,174
  4,512
  4,872
  5,254
  5,660
  6,092
  6,549
  7,034
  7,549
  8,094
  8,672
  9,283

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  31,438
  32,699
  34,042
  35,472
  36,989
  38,598
  40,303
  42,106
  44,012
  46,025
  48,149
  50,391
  52,754
  55,244
  57,867
  60,629
  63,537
  66,597
  69,817
  73,205
  76,767
  80,513
  84,451
  88,591
  92,943
  97,517
  102,324
  107,374
  112,681
  118,257
Adjusted assets (=assets-cash), $m
  31,438
  32,699
  34,042
  35,472
  36,989
  38,598
  40,303
  42,106
  44,012
  46,025
  48,149
  50,391
  52,754
  55,244
  57,867
  60,629
  63,537
  66,597
  69,817
  73,205
  76,767
  80,513
  84,451
  88,591
  92,943
  97,517
  102,324
  107,374
  112,681
  118,257
Revenue / Adjusted assets
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
Average production assets, $m
  19,087
  19,853
  20,668
  21,536
  22,458
  23,435
  24,469
  25,564
  26,721
  27,943
  29,233
  30,594
  32,029
  33,541
  35,133
  36,810
  38,576
  40,434
  42,389
  44,445
  46,608
  48,882
  51,273
  53,787
  56,429
  59,206
  62,124
  65,191
  68,413
  71,798
Working capital, $m
  -1,087
  -1,131
  -1,177
  -1,226
  -1,279
  -1,335
  -1,393
  -1,456
  -1,522
  -1,591
  -1,665
  -1,742
  -1,824
  -1,910
  -2,001
  -2,096
  -2,197
  -2,303
  -2,414
  -2,531
  -2,654
  -2,784
  -2,920
  -3,063
  -3,214
  -3,372
  -3,538
  -3,712
  -3,896
  -4,089
Total debt, $m
  7,695
  8,570
  9,502
  10,494
  11,547
  12,664
  13,847
  15,098
  16,421
  17,818
  19,293
  20,848
  22,488
  24,216
  26,037
  27,954
  29,972
  32,096
  34,330
  36,681
  39,153
  41,753
  44,486
  47,359
  50,380
  53,554
  56,890
  60,395
  64,078
  67,947
Total liabilities, $m
  21,818
  22,693
  23,625
  24,617
  25,670
  26,787
  27,970
  29,221
  30,544
  31,941
  33,416
  34,971
  36,611
  38,339
  40,160
  42,077
  44,095
  46,219
  48,453
  50,804
  53,276
  55,876
  58,609
  61,482
  64,503
  67,677
  71,013
  74,518
  78,201
  82,070
Total equity, $m
  9,620
  10,006
  10,417
  10,854
  11,319
  11,811
  12,333
  12,884
  13,468
  14,084
  14,734
  15,420
  16,143
  16,905
  17,707
  18,553
  19,442
  20,379
  21,364
  22,401
  23,491
  24,637
  25,842
  27,109
  28,441
  29,840
  31,311
  32,857
  34,480
  36,187
Total liabilities and equity, $m
  31,438
  32,699
  34,042
  35,471
  36,989
  38,598
  40,303
  42,105
  44,012
  46,025
  48,150
  50,391
  52,754
  55,244
  57,867
  60,630
  63,537
  66,598
  69,817
  73,205
  76,767
  80,513
  84,451
  88,591
  92,944
  97,517
  102,324
  107,375
  112,681
  118,257
Debt-to-equity ratio
  0.800
  0.860
  0.910
  0.970
  1.020
  1.070
  1.120
  1.170
  1.220
  1.270
  1.310
  1.350
  1.390
  1.430
  1.470
  1.510
  1.540
  1.570
  1.610
  1.640
  1.670
  1.690
  1.720
  1.750
  1.770
  1.790
  1.820
  1.840
  1.860
  1.880
Adjusted equity ratio
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  743
  827
  921
  1,026
  1,140
  1,265
  1,402
  1,549
  1,709
  1,882
  2,129
  2,328
  2,542
  2,771
  3,017
  3,279
  3,558
  3,857
  4,174
  4,512
  4,872
  5,254
  5,660
  6,092
  6,549
  7,034
  7,549
  8,094
  8,672
  9,283
Depreciation, amort., depletion, $m
  2,159
  2,242
  2,331
  2,425
  2,525
  2,631
  2,744
  2,863
  2,989
  3,121
  3,178
  3,325
  3,481
  3,646
  3,819
  4,001
  4,193
  4,395
  4,607
  4,831
  5,066
  5,313
  5,573
  5,846
  6,134
  6,435
  6,753
  7,086
  7,436
  7,804
Funds from operations, $m
  2,902
  3,069
  3,252
  3,451
  3,665
  3,897
  4,145
  4,412
  4,698
  5,003
  5,306
  5,654
  6,024
  6,417
  6,836
  7,280
  7,751
  8,251
  8,782
  9,343
  9,938
  10,568
  11,234
  11,938
  12,683
  13,470
  14,302
  15,180
  16,108
  17,087
Change in working capital, $m
  -41
  -44
  -46
  -49
  -52
  -56
  -59
  -62
  -66
  -70
  -73
  -77
  -82
  -86
  -91
  -96
  -101
  -106
  -111
  -117
  -123
  -130
  -136
  -143
  -150
  -158
  -166
  -175
  -183
  -193
Cash from operations, $m
  2,942
  3,113
  3,299
  3,500
  3,718
  3,952
  4,204
  4,475
  4,764
  5,073
  5,380
  5,731
  6,105
  6,503
  6,926
  7,375
  7,852
  8,357
  8,893
  9,460
  10,061
  10,697
  11,370
  12,081
  12,833
  13,628
  14,468
  15,355
  16,291
  17,280
Maintenance CAPEX, $m
  -1,996
  -2,075
  -2,158
  -2,247
  -2,341
  -2,441
  -2,547
  -2,660
  -2,779
  -2,904
  -3,037
  -3,178
  -3,325
  -3,481
  -3,646
  -3,819
  -4,001
  -4,193
  -4,395
  -4,607
  -4,831
  -5,066
  -5,313
  -5,573
  -5,846
  -6,134
  -6,435
  -6,753
  -7,086
  -7,436
New CAPEX, $m
  -723
  -765
  -816
  -868
  -921
  -977
  -1,035
  -1,095
  -1,157
  -1,222
  -1,290
  -1,361
  -1,435
  -1,512
  -1,593
  -1,677
  -1,765
  -1,858
  -1,955
  -2,056
  -2,163
  -2,274
  -2,391
  -2,514
  -2,642
  -2,777
  -2,918
  -3,066
  -3,222
  -3,385
Cash from investing activities, $m
  -2,719
  -2,840
  -2,974
  -3,115
  -3,262
  -3,418
  -3,582
  -3,755
  -3,936
  -4,126
  -4,327
  -4,539
  -4,760
  -4,993
  -5,239
  -5,496
  -5,766
  -6,051
  -6,350
  -6,663
  -6,994
  -7,340
  -7,704
  -8,087
  -8,488
  -8,911
  -9,353
  -9,819
  -10,308
  -10,821
Free cash flow, $m
  223
  273
  325
  386
  456
  534
  622
  720
  828
  946
  1,052
  1,193
  1,345
  1,510
  1,688
  1,879
  2,085
  2,306
  2,543
  2,796
  3,067
  3,357
  3,665
  3,994
  4,345
  4,717
  5,114
  5,536
  5,983
  6,459
Issuance/(repayment) of debt, $m
  831
  875
  932
  992
  1,053
  1,117
  1,183
  1,251
  1,323
  1,397
  1,475
  1,555
  1,640
  1,728
  1,820
  1,917
  2,018
  2,124
  2,235
  2,351
  2,472
  2,600
  2,733
  2,873
  3,020
  3,174
  3,336
  3,505
  3,683
  3,870
Issuance/(repurchase) of shares, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  831
  875
  932
  992
  1,053
  1,117
  1,183
  1,251
  1,323
  1,397
  1,475
  1,555
  1,640
  1,728
  1,820
  1,917
  2,018
  2,124
  2,235
  2,351
  2,472
  2,600
  2,733
  2,873
  3,020
  3,174
  3,336
  3,505
  3,683
  3,870
Total cash flow (excl. dividends), $m
  1,055
  1,147
  1,257
  1,378
  1,509
  1,651
  1,805
  1,971
  2,151
  2,343
  2,527
  2,748
  2,985
  3,238
  3,508
  3,796
  4,103
  4,430
  4,778
  5,147
  5,540
  5,956
  6,399
  6,868
  7,365
  7,892
  8,450
  9,041
  9,666
  10,328
Retained Cash Flow (-), $m
  -366
  -386
  -411
  -437
  -464
  -492
  -522
  -552
  -583
  -616
  -650
  -686
  -723
  -762
  -803
  -845
  -890
  -936
  -985
  -1,036
  -1,090
  -1,146
  -1,205
  -1,267
  -1,332
  -1,400
  -1,471
  -1,546
  -1,624
  -1,706
Prev. year cash balance distribution, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  688
  762
  846
  940
  1,044
  1,159
  1,284
  1,420
  1,567
  1,727
  1,877
  2,062
  2,262
  2,476
  2,706
  2,951
  3,214
  3,494
  3,792
  4,111
  4,450
  4,810
  5,193
  5,601
  6,033
  6,492
  6,979
  7,495
  8,042
  8,622
Discount rate, %
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
  660
  697
  736
  774
  810
  841
  867
  887
  900
  905
  891
  880
  860
  831
  794
  750
  699
  643
  584
  522
  460
  399
  340
  285
  235
  189
  150
  116
  88
  65
Current shareholders' claim on cash, %
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

Devon Energy Corporation is an independent energy company. The Company also controls EnLink Midstream Partners, L.P. (EnLink). The Company's segments include U.S., Canada and EnLink. The Company is engaged primarily in the exploration, development and production of oil, natural gas and natural gas liquids (NGLs). The Company's operations are concentrated in various North American onshore areas in the United States and Canada. The Company's U.S. and Canada segments are primarily engaged in oil and gas exploration and production activities. EnLink is a master limited partnership (MLP) with a midstream business and operations located across the United States. EnLink focuses on providing gathering, transmission, processing, storage, fractionation and marketing to upstream oil and natural gas producers. The Company's properties include Barnett Shale, Delaware Basin, Eagle Ford, Heavy Oil, Rockies Oil and STACK.

FINANCIAL RATIOS  of  Devon Energy (DVN)

Valuation Ratios
P/E Ratio -6.3
Price to Sales 2
Price to Book 3.5
Price to Tangible Book
Price to Cash Flow 11.9
Price to Free Cash Flow -35.7
Growth Rates
Sales Growth Rate -21.6%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -56.1%
Cap. Spend. - 3 Yr. Gr. Rate -19.2%
Financial Strength
Quick Ratio NaN
Current Ratio 0.2
LT Debt to Equity 171.3%
Total Debt to Equity 171.3%
Interest Coverage -6
Management Effectiveness
Return On Assets -10%
Ret/ On Assets - 3 Yr. Avg. -13.8%
Return On Total Capital -18.3%
Ret/ On T. Cap. - 3 Yr. Avg. -22.7%
Return On Equity -50.9%
Return On Equity - 3 Yr. Avg. -48.1%
Asset Turnover 0.4
Profitability Ratios
Gross Margin 83.3%
Gross Margin - 3 Yr. Avg. 84%
EBITDA Margin -14.7%
EBITDA Margin - 3 Yr. Avg. -36.2%
Operating Margin -30.7%
Oper. Margin - 3 Yr. Avg. -54.9%
Pre-Tax Margin -37.6%
Pre-Tax Margin - 3 Yr. Avg. -59.6%
Net Profit Margin -32%
Net Profit Margin - 3 Yr. Avg. -44.6%
Effective Tax Rate 4.5%
Eff/ Tax Rate - 3 Yr. Avg. 30.4%
Payout Ratio -6.7%

DVN stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the DVN stock intrinsic value calculation we used $13949 million for the last fiscal year's total revenue generated by Devon Energy. The default revenue input number comes from 0001 income statement of Devon Energy. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our DVN stock valuation model: a) initial revenue growth rate of 3.9% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for DVN is calculated based on our internal credit rating of Devon Energy, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Devon Energy.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of DVN stock the variable cost ratio is equal to 50.5%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $5631 million in the base year in the intrinsic value calculation for DVN stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.9% for Devon Energy.

Corporate tax rate of 27% is the nominal tax rate for Devon Energy. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the DVN stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for DVN are equal to 131.7%.

Life of production assets of 9.2 years is the average useful life of capital assets used in Devon Energy operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for DVN is equal to -7.5%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $9254 million for Devon Energy - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 508.8 million for Devon Energy is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Devon Energy at the current share price and the inputted number of shares is $20.3 billion.

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