Better Buy: Rite Aid vs. Devon Energy

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In today's ­first round matchup of The Motley Fool Better-Buy Tournament, Rite Aid squares off against Devon Energy in a battle to determine which stock is the better buy now. The 64-company tournament pits two Motley Fool analysts against each other as they make the case for their stocks, with the winner determined by you, the readers.

Motley Fool Consumer Goods Editor Mark Reeth thinks Rite Aid (NYSE: RAD  ) is one of the best under-the-radar stocks on the market. A lot of people know how much the company struggled over the last few years, but significantly fewer know how strong the company looks today. It turned a profit of $118 million in 2013, and is on track to beat that this year thanks to the company's strong pharmacy segment. This segment will also propel profits thanks to the effects of health insurance reform, which Rite Aid is well positioned to take advantage of.

Devon Energy (NYSE: DVN  ) is still a tremendous value play in an expensive marketplace, argues Motley Fool analyst Joel South. With $6 billion in cash and 2.6 billion barrels of oil equivalent in proved reserves, Devon is incredibly de-levered, giving it the capital to maximize growth without being handcuffed by commodity prices. Devon Energy is also an environmental stalwart in an industry trying to clean up its reputation. The company is part of the EPA's Natural Gas STAR Program, encouraging sharp reduction in greenhouse gases and increased operational efficiencies. Bottom line, Devon Energy is a leading oil and gas producer with immense upside.

Watch these analysts square off in the video below and then vote for a winner. Then check out the other companies in the Motley Fool Better-Buy Bracket

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Cast your vote in the poll below the video!

Read/Post Comments (3) | Recommend This Article (5)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On March 20, 2014, at 4:17 PM, AlexKalman wrote:

    Rite Aid Market Cap 6.6 Billion.

    CVS Market Cap 87 Billion.

    Walgreens Market Cap 63 Billion.

    Compare them apples.

    Competition could take RAD over today for 10 cents on the dollar at about $8.90 / share.

  • Report this Comment On March 21, 2014, at 11:01 AM, mtaycpa515 wrote:

    Are you kidding? Rite Aid is at its 52-week high. Analysts have an average target of $6.62. It's trading at $6.82. They are projecting $0.35 EPS next year. What IS to like?

    Devon is trading at $63.89 with an average target of $74 and projected EPS next year of over $6.00. Yes, I said $6. There is no comparison.

    With Rite Aid, you are trading HOPE. With Devon, you are trading FACTS.

    I am disappointed in the video comparison.

  • Report this Comment On March 22, 2014, at 2:44 AM, skisnob wrote:

    riteaid will be $9 next yr and maybe more.It is price right with earnings and a plan for growth.It is a gamble but that is the market.

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Joel South

Joel is a University of Washington graduate and covers energy and materials for The Motley Fool. Be sure to follow The Motley Fool's energy and materials Twitter for all your energy and materials coverage.

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Related Tickers

9/3/2015 1:13 PM
DVN $40.79 Up +0.07 +0.17%
Devon Energy CAPS Rating: ****
RAD $8.19 Up +0.03 +0.31%
Rite Aid Corp CAPS Rating: ***