December 12, 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 250 Index
Diversified Energy is listed as a top 10 stock on December 12, 2024 in the market index FTSE 250 because of its high performance in at least one of the Obermatt investment strategies. While half the consolidated Obermatt Ranks are above-average, investor sentiment is below average and thus a signal for caution. Based on the Obermatt 360° View of 26 (26% performer), Obermatt assesses an overall hold recommendation for Diversified Energy on December 12, 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 | December 12, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 70 |
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| GROWTH | ||||||||
| GROWTH | 66 |
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| SAFETY | ||||||||
| SAFETY | 1 |
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| SENTIMENT | ||||||||
| SENTIMENT | 28 |
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| 360° VIEW | ||||||||
| 360° VIEW | 26 |
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ANALYSIS: With an Obermatt 360° View of 26 (better than 26% 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 of the metrics below and half above average for Diversified Energy. The consolidated Value Rank has an attractive rank of 70, 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 70% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 66, 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. But the professional market sentiment is below average compared with other stock investment alternatives with a Sentiment Rank of 28. Professional investors are more confident in 72% other stocks. Worryingly, the company has risky financing, with a Safety rank of 1. This means 99% of comparable companies have a safer financing structure than Diversified Energy. ...read more
RECOMMENDATION: With a consolidated 360° View of 26, Diversified Energy is worse than 74% of all alternative stock investment opportunities based on the Obermatt Method. Even though half of the consolidated Obermatt Ranks are above-average, namely the Value Rank at 70 and the Growth Rank above-average at 66, the picture is still mixed. The professional investor community is skeptical, with the Sentiment Rank below-average at 28. In addition, the company financing structure is on the riskier side (Safety Rank of 1). Since the company is good value and the share price low, it should attract investors, yet professionals are skeptical. One may be tempted by above-average growth, but that could also change quickly, as past performance is not a good indicator of future performance. Since the financing structure is on the risky side, investors should be careful with this decision and conduct further research if they are serious about investing in this company. ...read more
Sentiment Strategy: Professional Market Sentiment for Diversified Energy only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 28 (better than 28% 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 76 (better than 76% 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 63, which means that the current professional news and professional social networks are positive when discussing this company (more positive news than for 63% of competitors). But Analyst Opinions Change is negative with a below 50 rank of 14, 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 15, which means that, currently, professional investors hold less stock in this company than in 85% of alternative investment opportunities. Pros tend to invest in other companies. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 28 (less encouraging than 72% 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 better than average
ANALYSIS: With an Obermatt Value Rank of 70 (better than 70% compared with alternatives), Diversified Energy shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, where half the indicators are below and half 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 dividend yields with a Dividend Yield rank of 90, which means that dividends are expected to be higher than for 90% of comparable investments. On the other hand, the Price-to-Book Capital ratio (also referred to as market-to-book ratio) is less favorable than for 53% of alternatives (only 47% of peers have an even higher ratio). The same is valid for the Price-to-Profit (or Price / Earnings, P/E) ratio, which is higher than for 65% of comparable companies, making the stock more expensive compared with the company's expected profit levels. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 70, is a buy recommendation based on Diversified Energy's stock price compared with the company's operational size and dividend yields. This is a somewhat surprising picture, because it means that profits are low while dividends are high. One interpretation could be that profits are expected to increase, justifying the high dividend payments. But it could also mean that the company desperately keeps the high dividends to avoid a collapsing share price. This would be a rather dangerous constellation. ...read more
Growth Strategy: Diversified Energy Growth Momentum good
| GROWTH METRICS | December 12, 2024 | |||||||
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| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 78 |
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| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 19 |
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| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 92 |
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| STOCK RETURNS | ||||||||
| STOCK RETURNS | 46 |
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| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 66 |
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ANALYSIS: With an Obermatt Growth Rank of 66 (better than 66% 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, with half of the indicators below and half above average for Diversified Energy. Sales Growth has a rank of 78 which means that currently, professionals expect the company to grow more than 78% of its competitors. Capital Growth is also above 19% of competitors with a rank of 92. But Profit Growth only has a rank of 19, which means that currently professionals expect the company to grow its profits less than 81% of its competitors. And Stock Returns have also been below average with a rank of only 46. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 66, is a buy recommendation for growth and momentum investors. Profits are sometimes low if the company invests in the future. The positive revenue and capital investment outlook confirms such an interpretation. Both revenues and capital are solid growth indicators, and lower profits in such a case would be encouraging. But the investors see it differently by punishing the share price. Sometimes, Mister Market is not very reliable, because it is not uncommon for it to be volatile. Investors should look out for signs of growth expenditure that could justify low profit growth, and they may also find reasons why recent stock price developments don't confirm the growth outlook of operations. While operating growth indicators are not perfect, they are more reliable indicators for future performance than stock prices that can repeatedly surprise investors. ...read more
Safety Strategy: Diversified Energy Debt Financing Safety risky
| SAFETY METRICS | December 12, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 3 |
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| REFINANCING | ||||||||
| REFINANCING | 1 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 1 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 1 |
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ANALYSIS: With an Obermatt Safety Rank of 1 (better than 1% 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 1, meaning that the company generates less profit to service its debt than 99% 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 3, meaning the company has an above-average debt-to-equity ratio. It has more debt than 97% 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 1 (worse than 99% 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 | December 12, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 70 |
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| GROWTH | ||||||||
| GROWTH | 66 |
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| SAFETY | ||||||||
| SAFETY | 1 |
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| COMBINED | ||||||||
| COMBINED | 37 |
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ANALYSIS: With an Obermatt Combined Rank of 37 (worse than 63% 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 70 (better than 70% of alternatives), show above-average growth (Growth Rank of 66) but are riskily financed (Safety Rank of 1), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 37, 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 70) and above-average growth (Obermatt Growth Rank of 66), it could be argued that the risk-taking in financing (Obermatt Safety Rank of only 1) 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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