Devon Energy vs. ConocoPhillips: Which Oil Stock Is the Better Buy?

The United States is one of the world's leading producers of oil and natural gas, with key production regions including the Permian Basin, Eagle Ford, Bakken Formation and the Gulf of America. Technological advancements such as hydraulic fracturing and horizontal drilling have significantly boosted domestic production, strengthening the nation's energy security and reducing dependence on imported energy. Against this backdrop, let's focus on Devon Energy DVN and ConocoPhillips COP.

Devon is an independent energy company engaged primarily in the exploration, development and production of oil and natural gas. The company’s oil and gas operations are concentrated onshore in the United States.

ConocoPhillips is among the largest explorers and producers of oil and natural gas in the world. The company has a strong presence across conventional and unconventional plays in 15 countries.

Let's delve deeper to find out which stock among DVN and COP is better positioned for sustainable growth.

The Case for DVN

Devon Energy’s expanded U.S. portfolio spans the Permian Basin, Rockies, Eagle Ford, Anadarko Basin and Marcellus Shale, providing diversified exposure to oil, natural gas and natural gas liquids. Production from newly drilled wells continues to support volumes across these regions, although the company remains focused on concentrating its portfolio around its premier Permian assets.

The combination with Coterra Energy created a larger and more diversified U.S. exploration and production company, with a particularly strong position in the Delaware Basin. Coterra’s legacy assets have begun contributing to Devon’s production, while the integration remains on track to deliver the targeted $1 billion in synergies.

Devon is also strengthening profitability through disciplined cost management. The company is divesting higher-cost assets, prioritizing efficient production opportunities and reducing drilling and completion expenses. Workforce optimization and other integration initiatives should provide additional support to operating margins.

To moderate commodity-price risk and improve cash flow visibility, Devon hedges a portion of its production. As of June 30, 2026, roughly 30% of its remaining 2026 oil production and 25% of natural gas production were hedged. Oil collars and basis swaps further support capital planning during periods of price volatility.

Shareholder returns remain central to Devon’s capital-allocation strategy. Following the Coterra merger, the company increased its quarterly fixed dividend 33% and also authorized an $8 billion share-repurchase program through June 2029. Devon has $7.8 billion available. Repurchases continued in the third quarter, with management planning a mix of systematic and opportunistic buybacks while targeting annual growth in the fixed dividend.

The Case for COP

ConocoPhillips offers a balanced long-term growth profile, supported by its deep inventory of low-cost upstream assets, leading Lower 48 position and expanding global LNG portfolio.

The company’s Lower 48 operations remain anchored in the Permian Basin, Eagle Ford and Bakken, where a sizable drilling inventory supports repeatable development and capital-efficient production growth. Lower 48 output increased to 1,479 MBOED in the second quarter of 2026 from 1,453 MBOED in the first quarter. This included 720 MBOED from the Delaware Basin and 202 MBOED from the Midland Basin. Total Permian production surpassed the company record of 900 MBOED. Management expects further Lower 48 growth in the third quarter, with companywide production projected between 2.29 MMBOED and 2.32 MMBOED.

ConocoPhillips is also expanding its LNG presence across the United States, Qatar, Australia and other markets. LNG developments, together with Port Arthur LNG and the Willow project in Alaska, should provide additional production and cash flow beyond the company’s existing asset base. Management expects these projects and other initiatives to generate approximately $7 billion of incremental free cash flow by 2029, including about $1 billion annually from 2026 through 2028.

Cost discipline and declining reinvestment requirements should strengthen cash generation and resilience across commodity cycles. ConocoPhillips plans to return 45% of cash from operations to shareholders in 2026 through dividends and share repurchases. Returns averaged roughly 40% during the first half, suggesting distributions should accelerate in the second half.

However, sensitivity to commodity prices, weak natural gas realizations, increasing environmental accruals and geopolitical or project-execution risks could constrain results despite the company’s durable asset base and improving cash-flow outlook.

Estimates for DVN and COP    

The Zacks Consensus Estimate for DVN’s 2026 revenues implies a 48.3% increase, and that for EPS suggests a 38.7% year-over-year increase.  EPS estimates for 2026 have moved 4.4% north in the past 30 days. It has a Growth Score of A. The expected long-term earnings growth rate is pegged at 7%.

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The Zacks Consensus Estimate for COP’s 2026 revenues implies a 13.9% increase, and that for EPS indicates a 71.3% increase. The consensus estimate for 2026 earnings has risen 14.7% in the past 30 days. The company has a Growth Score of A. The expected long-term earnings growth rate is pegged at 9%.

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Price Performance of DVN and COP

DVN shares have gained 28.6% year to date, while COP shares have gained 38.4% in the same time. 

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Are DVN and COP Shares Expensive?

DVN is trading at a forward 12-month price-to-earnings multiple of 9.23, higher than its median of 8.16 over the past three years. COP’s forward 12-month price-to-sales multiple sits at 13.41, higher than its median of 12.79 over the past three years.

DVN is cheaper than COP presently.

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Conclusion

Devon Energy benefits from a diversified production mix of oil, natural gas and natural gas liquids, complemented by a low-cost operating structure that supports healthy profit margins. Its broad, multi-basin asset portfolio generates robust free cash flow, providing the financial flexibility to strengthen its balance sheet and return value to shareholders. Moreover, contributions from recently acquired assets are expected to boost production volumes and support the company’s growth.

ConocoPhillips continues to benefit from deep shale inventory, expanding LNG exposure, Willow progress and disciplined capital returns, which support durable cash generation and lower reinvestment needs.

DVN and COP carry a Zacks Rank #3 (Hold) each. Though DVN is cheaper, COP’s price appreciation, analysts’ optimism, and growth projections give it an edge over DVN.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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