Better Buy: Rite Aid vs. Devon Energy

We've collected the most popular companies among readers and put them head-to-head in a good old-fashioned challenge we're calling The Motley Fool Better-Buy Tournament.

Mar 20, 2014 at 12:00PM

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

This year's winning stock?
There's a huge difference between a good stock and a stock that can make you rich. The Motley Fool's chief investment officer has selected his No. 1 stock for 2014, and it's one of those stocks that could make you rich. You can find out which stock it is in the special free report "The Motley Fool's Top Stock for 2014." Just click here to access the report and find out the name of this under-the-radar company.

Cast your vote in the poll below the video!

Joel South has no position in any stocks mentioned. Mark Reeth has no position in any stocks mentioned. The Motley Fool owns shares of Devon Energy. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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