Devon Energy Corporation (DVN)

Return on equity (ROE)

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Net income	US$ in thousands	3,747,000	6,015,000	2,813,000	-2,680,000	-355,000
Total stockholders’ equity	US$ in thousands	12,061,000	11,167,000	9,262,000	2,885,000	5,802,000
ROE		31.07%	53.86%	30.37%	-92.89%	-6.12%

December 31, 2023 calculation

ROE = Net income ÷ Total stockholders’ equity
= $3,747,000K ÷ $12,061,000K
= 31.07%

The return on equity (ROE) of Devon Energy Corp. has exhibited significant fluctuations over the past five years. In 2023, the ROE stood at 31.07%, representing a decline from the previous year's 53.35%. Despite this decrease, the ROE remained positive and above 30%, indicating the company's ability to generate profit from shareholders' equity.

The sharp decrease in ROE in 2020, plunging to -93.03%, raises concerns about the company's performance during that period. Such a low ROE suggests that Devon Energy Corp. incurred significant losses relative to its equity, potentially due to operational challenges or extraordinary expenses.

The subsequent recovery in 2021 with an ROE of 30.05% indicates an improvement in the company's profitability and efficiency in managing its equity. However, it is essential to note that the ROE remains below the levels seen in the earlier years.

The negative ROE in 2019 (-6.15%) also indicates a period of inefficiency in utilizing shareholders' equity to generate returns. This performance may have been influenced by various factors such as industry dynamics, market conditions, or internal operational issues.

Overall, the fluctuating ROE of Devon Energy Corp. over the past five years suggests variability in the company's profitability and efficiency in generating returns for its shareholders. Further analysis of the underlying factors driving these fluctuations would be necessary to assess the company's financial health and performance accurately.