DVN vs SM: Which Is the Better Buy in 2026?
Last updated August 2026
Short answer
DVN and SM are similarly sized, but SM trades noticeably cheaper on forward earnings (4.43x vs 8.62x): the market is paying up for DVN's profile and pricing SM more conservatively, or for faster growth. Which you prefer comes down to the drivers you believe, and whether adding either over-concentrates what you already own.
DVN vs SM: the tie-breaker metrics
Same yardstick, side by side (as of August 2026). Valuation lined up like this is most meaningful for two names in the same corner of the market, which these are. Figures are approximate; verify before investing.
| Metric | DVN | SM | What it tells you |
|---|---|---|---|
| Forward P/E | 8.62 | 4.43 | Valuation on next year's expected earnings, the same yardstick for both. Lower is cheaper for that growth; higher means the market is paying up. |
| Trailing P/E | 12.57 | 13.72 | Valuation on the last 12 months. A big drop from trailing to forward means the market expects earnings to jump, so more growth is already in the price. |
| Beta | 0.43 | 0.73 | Volatility vs the market. Above 1 swings harder than the index; below 1 is steadier. Higher beta means bigger drawdowns to hold through. |
| Price vs 52-week range | 64% of range | 82% of range | Where today's price sits between the 52-week low and high. Near the high is momentum with less margin of safety; near the low is out of favor or a discount, depending on why. |
| Price / book | 1.82 | 1.13 | How much you pay over book value. Very high can signal an asset-light, high-return business or a rich price. |
Reading it: SM is the cheaper of the two on forward earnings, but cheaper is not the same as better. Pair the valuation with growth (how far the forward P/E sits below the trailing P/E) and risk (beta) before you decide.
Before you buy: how DVN and SM affect your concentration
The metrics above tell you which is the marginally better business. The bigger risk for most people is not picking the slightly worse stock, it is over-concentrating. DVN and SM share themes, so owning both, or adding either to what you already hold, can quietly push a large share of your portfolio into one bet.
This is the part a generic comparison page cannot answer, because it depends on what you own. Connect your brokerage and Walnut shows your real, combined DVN and SM exposure, flags overlap with your existing positions, and tells you if adding one would tip you past a concentration you are comfortable with, read-only by default, with your login staying at your broker. Walnut is not an investment adviser.
What does Devon Energy (DVN) do?
Devon Energy is a large US independent exploration and production company that finds and produces crude oil, natural gas, and natural gas liquids. Its portfolio is anchored in the Delaware Basin (part of the Permian) and includes positions in the Anadarko Basin, Eagle Ford, Williston, and other onshore US plays. As a producer that sells raw commodities into global markets, Devon is largely a price-taker: its revenue, margins, and shareholder payouts are driven mainly by oil and gas prices and by how efficiently it can drill and complete wells, rather than by any single product or brand.
What does SM Energy Company (SM) do?
SM Energy Company is an independent oil and gas producer that explores for, develops, and produces crude oil, natural gas, and natural gas liquids across several US basins. After closing its all-stock merger with Civitas Resources on January 30, 2026, the combined company operates a diversified portfolio spanning the Midland Basin (Permian) in West Texas, the DJ Basin in Colorado, South Texas (Eagle Ford), and the Uinta Basin in Utah. The deal, valued at roughly $12.8 billion in enterprise value including debt, nearly doubled SM's production base and made it one of the larger mid-cap E&P names, while the company retained the SM Energy name and NYSE ticker.
DVN vs SM: how do they differ?
Both fit overlapping themes, but they are not interchangeable. The useful comparison is which set of drivers and risks you want exposure to.
- DVN drivers: Oil and gas prices drive the story; Coterra merger and Permian scale.
- SM drivers: Civitas merger and multi-basin scale; Oil-weighted production growth.
Which fits which kind of investor
A faster-growing, richer-valued name usually swings harder, so it suits a longer horizon and a higher tolerance for volatility; a steadier, more cash-generative business suits a more conservative or income-minded investor. The honest test is which set of risks you could hold through a drawdown: The dominant risk is commodity price cyclicality: with revenue tied to oil and gas prices, a global slowdown, an OPEC+ supply shift, or weak natural gas prices can compress cash flow and shrink the variable dividend and buybacks quickly. For SM, sM's earnings and cash flow are tightly tied to volatile crude oil and natural gas prices, and a sustained drop in oil could pressure the shares toward the mid-teens.
DVN or SM: which should you pick?
DVN vs SM: the full fundamentals
DVN. Figures are approximate and tied to the asOf date; verify live numbers before acting, especially since the Coterra merger recently reshaped the combined company's scale. For a commodity producer, a low P/E can mislead because it may reflect high-price-cycle earnings that will not repeat if oil and gas prices fall. Free cash flow, breakeven cost per barrel, and the sustainability of the variable dividend are more useful lenses than a trailing earnings multiple.
SM. SM trades at a low forward earnings multiple relative to the broader oil and gas industry, which is common for E&P names because results swing with commodity prices and debt sits ahead of shareholders. The stock traded around $28 to $30 in mid-July 2026 after the Civitas merger roughly doubled the share count, with about 240 million shares outstanding. The annual fixed dividend of roughly $0.88 per share implies a yield in the range of 3%, and full-year 2026 capital spending is guided to $2.65 to $2.85 billion.
Headline figures (approximate, Jul 2026): DVN shows 2026 production guidance roughly 1.4 million barrels of oil equivalent per day (combined), including ~500,000 barrels of oil per day, 2026 capital spending ~$4.9 billion, with more than 60% directed to the Permian and roughly 31 rigs, shareholder returns framework targets returning up to ~70% of free cash flow via dividends and buybacks, coterra merger completed May 7, 2026; combined enterprise value reported around $58 billion; SM shows revenue (ttm) ~$3.8B, q1 2026 revenue ~$1.48B (+75% YoY, first full post-merger quarter), q1 2026 adjusted eps ~$1.55 (beat, down ~12% YoY), net production (q1 2026) ~371 MBoe/d (oil +83% YoY).
The bottom line: DVN vs SM
DVN and SM are related but distinct: same themes, different businesses and risks. Neither wins in the abstract; the right pick is whichever thesis you actually believe, sized so you are not over-concentrated in one theme. Walnut can show your combined DVN and SM exposure against your real portfolio. It is not an investment adviser.
Wondering how DVN or SM fits the portfolio you already own? Walnut is an AI investing app that connects your brokerage read-only and answers questions like that about your actual holdings: overlap, concentration, and how each position tracks the S&P 500. Compare the best AI portfolio analyzers or see the best AI investing apps in 2026.
Investing in Devon Energy with AI
Connect the broker you already use and ask Walnut's AI how DVN fits what you actually hold: whether you own it already through a fund, what it would do to your concentration, and how it has tracked the S&P 500. Read-only by default, and you approve anything before it reaches your broker.
FAQ
What is the difference between DVN and SM?
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Devon Energy is a large US independent exploration and production company that finds and produces crude oil, natural gas, and natural gas liquids. SM Energy Company is an independent oil and gas producer that explores for, develops, and produces crude oil, natural gas, and natural gas liquids across several US basins. They show up together because they share investment themes, but they are different businesses, so the better fit depends on which thesis you are expressing.
Is DVN or SM the better stock?
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Neither is universally better; they suit different views and risk levels. Walnut is informational, not investment advice. Compare what each does, the tie-breaker metrics above, and the risks, then decide which fits your thesis and what you already own.
Which is cheaper, DVN or SM?
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On forward P/E (as of August 2026), DVN trades at 8.62x and SM at 4.43x, so SM is the cheaper of the two on next year's expected earnings. A lower multiple is not automatically the better buy: a richer valuation can be justified by faster growth, and a lower one can reflect real risk. Weigh the multiple against how fast each business is compounding.
Should you own both DVN and SM?
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Because they share themes, owning both concentrates you in that theme. That can be intentional (a focused bet) or accidental (less diversification than it looks). Walnut can show your combined exposure across both, and whether adding either over-concentrates you, before you buy.
What are the risks of DVN vs SM?
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DVN: The dominant risk is commodity price cyclicality: with revenue tied to oil and gas prices, a global slowdown, an OPEC+ supply shift, or weak natural gas prices can compress cash flow and shrink the variable dividend and buybacks quickly. The Coterra merger adds integration and execution risk, and a large deal can distract management or fail to deliver expected synergies if operations do not mesh. Shale production also declines quickly, so Devon must keep reinvesting simply to hold output flat, and rising service and labor costs can erode margins. Regulatory and policy risk around drilling permits, methane rules, and taxes is real, as is the longer-term energy-transition question of demand for hydrocarbons. Weather, well performance, and takeaway constraints add operational variability. SM: SM's earnings and cash flow are tightly tied to volatile crude oil and natural gas prices, and a sustained drop in oil could pressure the shares toward the mid-teens. The company has reduced its hedge ratio, leaving significant 2026 production exposed to spot prices, which cuts both ways versus a more heavily hedged peer. Natural gas realizations, including Eagle Ford volumes, can be weak when regional and LNG demand softens, and Q1 2026 gas realizations were low. The Civitas merger raised net leverage and adds integration and execution risk, and at least one sell-side firm has carried an underperform view tied to oil-price concerns. As an exploration and production company, SM also faces well-productivity, cost-inflation, regulatory, and operational risks common to shale drilling.
Walnut is informational, not investment advice. This page is descriptive and not a recommendation to buy or sell DVN or SM; figures are approximate and dated (as of August 2026). Verify current data before investing.