January 25, 2024
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 January 25, 2024 in the market index FTSE 350 because of its high performance in at least one of the Obermatt investment strategies. As three out of four consolidated Obermatt Ranks exhibit excellent performance, it is a solid investment where the risk of paying too much for the shares is low. Based on the Obermatt 360° View of 46 (46% performer), Obermatt assesses an overall hold recommendation for Diversified Energy on January 25, 2024.
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 | January 25, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 90 |
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| GROWTH | ||||||||
| GROWTH | 59 |
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| SAFETY | ||||||||
| SAFETY | 3 |
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| SENTIMENT | ||||||||
| SENTIMENT | 54 |
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| 360° VIEW | ||||||||
| 360° VIEW | 46 |
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ANALYSIS: With an Obermatt 360° View of 46 (better than 46% 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 all but one indicator above average for Diversified Energy. The consolidated Value Rank has an attractive rank of 90, 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 the stock price is lower than for 90% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 59, which means that the company experiences above-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth, as well as stock returns. In addition, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 54. But the company’s financing is risky with a Safety rank of 3. This means 97% of comparable companies have a safer financing structure than Diversified Energy. ...read more
RECOMMENDATION: With a consolidated 360° View of 46, Diversified Energy is worse than 54% of all alternative stock investment opportunities based on the Obermatt Method. As three out of four consolidated Obermatt Ranks exhibit excellent performance, such as good value (Value Rank of 90), above-average growth (Growth Rank of 59), and positive market sentiment in the professional investor community (Sentiment Rank of 54), it is a solid stock investment where the risk of paying too much for the shares is limited, and disappointments are less likely, unless information not publicly available. Only the company financing structure is on the riskier side (Safety Rank of 3), but that would also mean better returns for shareholders if things work out well. Good value is sometimes an indication that the company's future is challenging. If they have been growing above average and are still a good value, it may indicate that this will not continue. We recommend evaluating whether the future of Diversified Energy is as difficult as the low price of the stock, despite good growth and positive professional investor sentiment, suggests. Since the professional community is optimistic, you might have less to worry about, and the stock is just not sufficiently visible right now, which may indicate good timing. ...read more
Sentiment Strategy: Professional Market Sentiment for Diversified Energy positive
ANALYSIS: With an Obermatt Sentiment Rank of 54 (better than 54% compared with alternatives), overall professional sentiment and engagement for the stock Diversified Energy is above 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 95 (better than 95% 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 71, which means that the current professional news and professional social networks are positive when discussing this company (more positive news than for 71% of competitors). But Analyst Opinions Change is negative with a below 50 rank of 9, 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 21, which means that, currently, professional investors hold less stock in this company than in 79% of alternative investment opportunities. Pros tend to invest in other companies. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 54 (more positive than 54% compared with investment alternatives), Diversified Energy has a reputation among professional investors that is above-average compared with 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 90 (better than 90% compared with alternatives) for 2024, 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 95, which means that the stock price compared with what market professionals expect for future sales is lower than for 95% 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 58% 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 51% of all competitors have an even higher price compared with book capital which puts the Price-to-Capital Rank for Diversified Energy to 49. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 90, 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 good
ANALYSIS: With an Obermatt Growth Rank of 59 (better than 59% compared with alternatives), Diversified Energy shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, where half of the indicators are below and half above average for Diversified Energy. Profit Growth, with a rank of 98 (better than 98% of its competitors), and Capital Growth, with a rank of 77, are both positive, which is a healthy sign for positive development. But Sales Growth has only a rank of 44, which means that, currently, professionals expect the company to grow less than 56% of its competitors, and Stock Returns are at a rank of 3. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 59, is a buy recommendation for growth and momentum investors. Stock returns that are a thing of the past can be less of a problem. Below-average revenue growth may be caused by divestments of underperforming businesses. If that is the case, then the positive developments of profit and capital growth are signs of a company with growth potential. If these are the reasons, overall growth is well on track to making this stock attractive for growth investors. ...read more
Safety Strategy: Diversified Energy Debt Financing Safety risky
| SAFETY METRICS | January 25, 2024 | |||||||
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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 a consolidated 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.
Combined financial peformance: Diversified Energy Below-Average Financial Performance
| COMBINED PERFORMANCE | January 25, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 90 |
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| GROWTH | ||||||||
| GROWTH | 59 |
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| SAFETY | ||||||||
| SAFETY | 25 |
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| COMBINED | ||||||||
| COMBINED | 46 |
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ANALYSIS: With an Obermatt Combined Rank of 46 (worse than 54% compared with investment alternatives), Diversified Energy (Oil & Gas Production, USA) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Diversified Energy are a good value (attractively priced) with a consolidated Value Rank of 90 (better than 90% of alternatives), show above-average growth (Growth Rank of 59) but are riskily financed (Safety Rank of 3), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 46, is a hold recommendation based on Diversified Energy's financial characteristics. As the company Diversified Energy's key financial metrics exhibit excellent performance in two areas, such as good value (Obermatt Value Rank of 90) and above-average growth (Obermatt Growth Rank of 59), it could be argued that the risk-taking in financing (Obermatt Safety Rank of only 3) indicates that the company is optimistic about the future and sees debt as an opportunity to boost returns. More debt means more shareholder returns if everything goes well. However, higher debt burdens are risky when interest rates rise or the business deteriorates in a crisis. If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. ...read more
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