September 21, 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 250 Index
Diversified Energy is listed as a top 10 stock on September 21, 2023 in the market index FTSE 250 because of its high performance in at least one of the Obermatt investment strategies. Only the Obermatt Value Rank exhibits above-average performance, which means that the stock is seen as critical by the professional community and other financial facts are below average, conveying mixed investment signals. Based on the Obermatt 360° View of 27 (27% performer), Obermatt assesses an overall hold recommendation for Diversified Energy on September 21, 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 | September 21, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 88 |
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| GROWTH | ||||||||
| GROWTH | 29 |
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| SAFETY | ||||||||
| SAFETY | 4 |
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| SENTIMENT | ||||||||
| SENTIMENT | 47 |
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| 360° VIEW | ||||||||
| 360° VIEW | 27 |
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ANALYSIS: With an Obermatt 360° View of 27 (better than 27% 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 three out of four indicators below average for Diversified Energy. Only the consolidated Value Rank has an attractive rank of 88, 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 88% of alternative stocks in the same industry. All other consolidated ranks are below average. The consolidated Growth Rank has a low rank of 29, which means that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. The consolidated Safety Rank has a riskier rank of 4, meaning the company has a riskier financing structure than 96% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. Finally, professionals are more pessimistic about the stock than for 53% of alternative investment opportunities, reflected in the consolidated Sentiment Rank of 47. ...read more
RECOMMENDATION: With a consolidated 360° View of 27, Diversified Energy is worse than 73% of all alternative stock investment opportunities based on the Obermatt Method. Only one of the consolidated Obermatt Ranks exhibits above-average performance, namely the Value Rank at a level of 88. All other ranks are below average, so proceed with caution. The company has below-average growth expectations (Growth Rank of 29), a riskier financing structure than the competition (Safety Rank of 4), and the market sentiment in the professional investor community ranking at (Sentiment Rank of 47) is negative. This combination is sensitive to a crisis, because high debt levels (low safety) require growth to finance the debt burden. It’s no wonder that the investor community indicators are skeptical (low 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. We recommend evaluating whether the future of Diversified Energy is as challenging as the low price of the stock suggests. Since the professional community is pessimistic, you might need to worry about the future of Diversified Energy. Only invest if you have solid reasons to believe that the low growth is temporary and the current market sentiment is an overreaction, possibly due to reputational issues in the past. ...read more
Sentiment Strategy: Professional Market Sentiment for Diversified Energy only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 47 (better than 47% compared with alternatives), overall professional sentiment and engagement for the stock Diversified Energy is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the indicators below and half above average for Diversified Energy. Analyst Opinions are at a rank of 93 (better than 93% of alternative investments), which means that currently, stock research analysts tend to recommend a stock investment in the company. Market Pulse is also positive with a rank of 91, which means that the current professional news and professional social networks are positive when discussing this company (more positive news than for 91% of competitors). But Analyst Opinions Change is negative with a below 50 rank of 21, which means that stock research experts are changing their opinions for the worse in recommending the company. In other words, they are getting more critical of investments in Diversified Energy. There are also only so many institutional investors holding company stock with a Professional Investors rank of 6, which means that, currently, professional investors hold less stock in this company than in 94% of alternative investment opportunities. Pros tend to invest in other companies. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 47 (less encouraging than 53% compared with investment alternatives), Diversified Energy has a reputation among professional investors that is below that of its competitors. The signals are ambivalent. The positive news in the market contradicts the negative change in analyst recommendations. Since the overall analyst recommendations are still above average, the stock may be safer for investing, especially if it is not an extra-large company where Pros tend to be less present. In such a case, the Pro Investor rank is not a problem. ...read more
Value Strategy: Diversified Energy Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 88 (better than 88% 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, with three out of four indicators above average for Diversified Energy. Price-to-Sales (P/S) is 91, which means that the stock price compared with what market professionals expect for future sales is lower than for 91% of comparable companies, indicating a good value concerning Diversified Energy's revenue size. The same is valid for expected Price-to-Profits (or Price / Earnings, P/E), more favorable than for 75% of alternatives. It is also positive for expected dividend yields with a Dividend Yield rank of 100 (dividends are expected to be higher than 100% of other stocks). But, compared with other companies in the same industry, the Price-to-Book Capital ratio (also referred to as market-to-book ratio) is higher than average, making the stock more expensive. Only 68% of all competitors have an even higher price compared with book capital which puts the Price-to-Capital Rank for Diversified Energy to 32. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 88, is a buy recommendation based on Diversified Energy's stock price compared with the company's operational size and dividend yields. A low level of book capital means that the company has a business that is leaner in assets than its competitors. For instance, the company could be leasing its production facilities or be more focussed on intellectual property, such as its brand and software, which is less visible in its book capital. If that is the case, the three good value ranks for Sales, Profits, and Dividends are reliable indicators for the stock price value. ...read more
Growth Strategy: Diversified Energy Growth Momentum low
| GROWTH METRICS | September 21, 2023 | |||||||
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| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 63 |
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| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 98 |
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| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 1 |
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| STOCK RETURNS | ||||||||
| STOCK RETURNS | 13 |
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| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 29 |
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ANALYSIS: With an Obermatt Growth Rank of 29 (better than 29% compared with alternatives), Diversified Energy shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Diversified Energy. Sales Growth has a rank of 63, which means that, currently, professionals expect the company to grow more than 63% of its competitors. Profit Growth with a rank of 98 is also above average. But Capital Growth has only a rank of 1, and Stock Returns with 13 are also below-average. Stock returns for Diversified Energy have recently been below 87% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 29, is a hold recommendation for growth and momentum investors. Are investors forecasting troubles based on the lack of operating investment activity at the company? This could be one explanation as to why stock returns are low. But stock returns can also be the result of correcting an error in the past, in this case, an overly optimistic outlook on the future, which is now more realistic. The Value Ranks may confirm such a picture. The more important growth indicators are revenues and profits, which are both above average for Diversified Energy. This is a positive sign from the company's operational side and may give investors courage, despite the poor recent stock price performance. ...read more
Safety Strategy: Diversified Energy Debt Financing Safety risky
| SAFETY METRICS | September 21, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 1 |
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| REFINANCING | ||||||||
| REFINANCING | 4 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 22 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 4 |
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ANALYSIS: With an Obermatt Safety Rank of 4 (better than 4% 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 22, meaning that the company generates less profit to service its debt than 78% 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 4 which means that the portion of the debt about to be refinanced is above average. It has more debt in the refinancing stage than 96% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 4 (worse than 96% 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.
Combined financial peformance: Diversified Energy Lowest Financial Performance
| COMBINED PERFORMANCE | September 21, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 88 |
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| GROWTH | ||||||||
| GROWTH | 29 |
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| SAFETY | ||||||||
| SAFETY | 22 |
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| COMBINED | ||||||||
| COMBINED | 23 |
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ANALYSIS: With an Obermatt Combined Rank of 23 (worse than 77% 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 Value Rank of 88 (better than 88% of alternatives) but show below-average growth (Growth Rank of 29), and are riskily financed (Safety Rank of 4), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 23, 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 88) but low growth (Obermatt Growth Rank of 29) and risky financing practices (Obermatt Safety Rank of 4), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 88% 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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