June 15, 2023
Top 10 Stock Diversified Energy Hold Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Diversified Energy – Top 10 Stock in FTSE 350 Index
Diversified Energy is listed as a top 10 stock on June 15, 2023 in the market index FTSE 350 because of its high performance in at least one of the Obermatt investment strategies. While only half of the consolidated Obermatt Ranks exhibit above-average performance, the professional market sentiment is positive and it may be a solid investment proposition, especially if a growth recovery is to be expected soon. Based on the Obermatt 360° View of 37 (37% performer), Obermatt assesses an overall hold recommendation for Diversified Energy on June 15, 2023.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Oil & Gas Production |
| Index | FTSE All Shares, FTSE 250, FTSE 350, Dividends USA, Sound Pay USA |
| Size class | Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View Diversified Energy Hold
| 360 METRICS | June 15, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 100 |
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| GROWTH | ||||||||
| GROWTH | 23 |
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| SAFETY | ||||||||
| SAFETY | 3 |
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| SENTIMENT | ||||||||
| SENTIMENT | 95 |
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| 360° VIEW | ||||||||
| 360° VIEW | 37 |
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ANALYSIS: With an Obermatt 360° View of 37 (better than 37% compared with alternatives), overall professional sentiment and financial characteristics for the stock Diversified Energy are below the industry average. The 360° View is based on consolidating four consolidated indicators, with half the metrics below and half above average for Diversified Energy. The consolidated Value Rank has an attractive rank of 100, which means that the share price of Diversified Energy is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means that the stock price is lower than for 100% of alternative stocks in the same industry. The consolidated Sentiment Rank has a good rank of 95, which means that professional investors are more optimistic about the stock than for 95% of alternative investment opportunities. But the consolidated Growth Rank has a low rank of 23, which means that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, invested capital growth, and stock returns. The consolidated Safety Rank has a riskier rank of 3, meaning the company has a riskier financing structure than 97 comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. ...read more
RECOMMENDATION: With a 360° View of 37, Diversified Energy is worse than 63% of all alternative stock investment opportunities based on the Obermatt Method. Half of the consolidated Obermatt Ranks exhibit above-average performance, but the other half are below market levels. The company enjoys a good value (Value Rank of 100) and positive market sentiment in the professional investor community (Sentiment Rank of 95), but growth expectations are below-average (Growth Rank of 23) and the financing structure is on the risky side(Safety Rank of 3). This combination is rather dangerous, because high debt levels (low safety) require growth to finance the debt burden. The current low growth level may be temporary, because professionals are actually optimistic (high sentiment). Good value is sometimes an indication that the company's future is challenging. The below-par growth performance may be the reason for this assessment. Companies with less growth typically have a lower price than fast-growing competitors. Even though professional investor sentiment is strong, we recommend further evaluating whether the future of Diversified Energy is as challenging as the stock's low price suggests. Since the professional community is optimistic, the stock might just be going through a more challenging phase now, indicating that timing might be good now. ...read more
Sentiment Strategy: Professional Market Sentiment for Diversified Energy very positive
ANALYSIS: With an Obermatt Sentiment Rank of 95 (better than 95% compared with alternatives) for 2023, overall professional sentiment and engagement for the stock Diversified Energy is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all four indicators above average for Diversified Energy. Analyst Opinions are at a rank of 95 (better than 95% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. Analyst Opinions Change is also positive with a rank of 60, which means that stock research experts are changing their opinions for the better and recommending investing in the company. They are getting more optimistic about stock investments in Diversified Energy. The Professional Investors rank is 70, which means that currently, professional investors hold more stock in this company than in 70% of alternative investment opportunities. Pros tend to favor investing in this company. Finally, Market Pulse has a rank of 84 which means that the current professional news and professional social networks are on the positive side when discussing this company (more positive news than for 84% of competitors). ...read more
RECOMMENDATION: With an Obermatt Sentiment Rank of 95 (more positive than 95% compared with investment alternatives), Diversified Energy has a reputation among professional investors that is significantly higher than that of its competitors. Since all market sentiment indicators are positive, the professional community highly recommends investment in the company. Does this mean Diversified Energy stocks are a safe investment? Far from it. Even professionals make mistakes. Especially in stock investing, there is a tendency to follow the leaders. Since trees don't grow to the heavens, such positive sentiment may also be interpreted as a danger sign. A lot of optimism can often be a sign of troubles to come, albeit unforeseen by most. ...read more
Value Strategy: Diversified Energy Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 100 (better than 100% compared with alternatives) for 2023, Diversified Energy shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for Diversified Energy. Price-to-Sales is 83 which means that the stock price compared with what market professionals expect for future sales is lower than for 83% of comparable companies, indicating a good value for Diversified Energy's revenue size. The same is valid for expected Price-to-Profits, more favorable than for 62% of alternatives, and this is also true for the Price-to-Book capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 100. Compared with other companies in the same industry, dividend yields of Diversified Energy are expected to be higher than for 99% of all competitors (a Dividend Yield rank of 99). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 100, is a strong buy recommendation based on Diversified Energy's stock price compared with the company's operational size and dividend yields. Since all value metrics are above the industry average, there is no objection to investing in Diversified Energy based on its detailed value metrics.
Growth Strategy: Diversified Energy Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 23 (better than 23% compared with alternatives), Diversified Energy shows one of the most restricted growth dynamics in its industry. There is little momentum in this company. The Growth Rank is based on consolidating four value indicators, with three out of four metrics below average for Diversified Energy. While Profit Growth has a good rank of 98, as professionals currently expect the company to grow its profits more than 98% of its competitors, all other growth indicators are below market averages. Sales Growth has a rank of 18, which means that currently professionals expect the company to grow less than 82% of its competitors, while Capital Growth has a rank of 4 and Stock Returns have been below market median, with a rank of 43 (57% of alternative investments were better). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 23, is a SELL recommendation for growth and momentum investors. While revenue growth and capital growth are good growth momentum indicators, profit is less reliable, because profits may increase due to cost-cutting measures which typically indicate negative growth momentum. "You can save a dollar only once" is the saying about such situations. Growth Investors should look at company priorities closely if they are interested in growth, because the increase in profits is not usually an indicator of growth, and stock prices have been below market, too. ...read more
Safety Strategy: Diversified Energy Debt Financing Safety risky
| SAFETY METRICS | June 15, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 1 |
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| REFINANCING | ||||||||
| REFINANCING | 1 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 25 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 3 |
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ANALYSIS: With an Obermatt Safety Rank of 3 (better than 3% compared with alternatives), the company Diversified Energy has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of Diversified Energy is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with all three metrics below average for Diversified Energy. Liquidity is at 25, meaning that the company generates less profit to service its debt than 75% of its competitors. This indicates that the company is on the riskier side when it comes to debt service. Even worse, Leverage is at a rank of 1, meaning the company has an above-average debt-to-equity ratio. It has more debt than 99% of its competitors. Finally, Refinancing is at a rank of 1 which means that the portion of the debt about to be refinanced is above average. It has more debt in the refinancing stage than 99% of its competitors. ...read more
RECOMMENDATION: With an Obermatt Safety Rank of 3 (worse than 97% compared with alternatives), Diversified Energy has a financing structure that is significantly riskier than that of its competitors. This combination is rather dangerous in most situations. Only very promising companies with bright future outlooks and stellar reputations can operate with such risky financing. ...read more
Combined financial peformance: Diversified Energy Lowest Financial Performance
| COMBINED PERFORMANCE | June 15, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 100 |
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| GROWTH | ||||||||
| GROWTH | 23 |
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| SAFETY | ||||||||
| SAFETY | 25 |
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| COMBINED | ||||||||
| COMBINED | 11 |
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ANALYSIS: With an Obermatt Combined Rank of 11 (worse than 89% compared with investment alternatives), Diversified Energy (Oil & Gas Production, USA) shares have lower financial characteristics compared with similar stocks. Shares of Diversified Energy are a good value (attractively priced) with a consolidated Obermatt Value Rank of 100 (better than 100% of alternatives) but show below-average growth (Growth Rank of 23), and are riskily financed (Safety Rank of 3), which means above-average debt burdens. ...read more
RECOMMENDATION: An Obermatt Combined Rank of 11, is a sell recommendation based on Diversified Energy's financial characteristics. As the company Diversified Energy's key financial metrics exhibit good value (Obermatt Value Rank of 100) but low growth (Obermatt Growth Rank of 23) and risky financing practices (Obermatt Safety Rank of 3), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 100% of comparable companies, may indicate the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity. ...read more
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