Diversified Energy Company (DEC)
NYSE:DEC
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Diversified Energy Company
(NYSE:DEC)
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Rating:67Neutral
Price Target:
$14.00
▼(-7.96% Downside)
Action:Downgraded
Date:05/11/26
The score is driven primarily by improving but still uneven financial quality (profitability and leverage improved in 2025, but earnings and cash conversion have been volatile). Valuation is a major positive (very low P/E and high dividend yield). Earnings-call commentary supports the outlook via reiterated guidance and strong Q1 metrics, while technicals are neutral-to-soft in the near term.
Positive Factors
Cash Generation
Material positive cash generation in 2025 demonstrates the business can produce meaningful free cash to fund dividends, buybacks, debt paydown and reinvestment. Sustained multi-hundred-million FCF provides durable financial flexibility for 2–6 months and beyond.
Negative Factors
Earnings Volatility / Operating Margin Quality
Large swings in profitability and a negative reported EBITDA margin despite net income highlight volatility and reliance on non‑operating items or accounting effects. This weakens confidence in persistent operating margins and makes future earnings less predictable.
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Positive Factors
Negative Factors
Cash Generation
Material positive cash generation in 2025 demonstrates the business can produce meaningful free cash to fund dividends, buybacks, debt paydown and reinvestment. Sustained multi-hundred-million FCF provides durable financial flexibility for 2–6 months and beyond.
Read all positive factors
Diversified Energy Company (DEC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$933.86M
Dividend Yield8.02%
Average Volume (3M)581.80K
Price to Earnings (P/E)2.8
Beta (1Y)0.33
Revenue GrowthN/A
EPS GrowthN/A
CountryUS
Employees1,589
SectorEnergy
Sector Strength52
IndustryOil & Gas Exploration & Production
Share Statistics
EPS (TTM)4.67
Shares Outstanding72,323,470
10 Day Avg. Volume541,211
30 Day Avg. Volume581,802
Financial Highlights & Ratios
PEG Ratio>-0.01
Price to Book (P/B)1.07
Price to Sales (P/S)0.66
P/FCF Ratio3.77
Enterprise Value/Market Cap4.22
Enterprise Value/Revenue2.44
Enterprise Value/Gross Profit9.57
Enterprise Value/Ebitda4.26
Forecast
1Y Price Target
$23.50Price Target Upside54.50% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering6
EPS Forecast (FY)3.11
Revenue Forecast (FY)$2.05B
Diversified Energy Company Business Overview & Revenue Model
Company Description
Diversified Energy Company PLC, rebranded from Diversified Gas & Oil PLC in May 2021, functions as an autonomous entity that owns and operates active natural gas and crude oil wells. Its main operational base is located within the Appalachian Basi...
How the Company Makes Money
DEC primarily makes money by producing and selling natural gas, natural gas liquids (NGLs), and oil from its operated and non-operated wells. Revenue is generated through sales of these commodities to purchasers under various marketing arrangement...
Diversified Energy Company Earnings Call Summary
Earnings Call Date:May 06, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Aug 17, 2026
Earnings Call Sentiment Positive
The call emphasized a series of strategic wins and strong operating and financial metrics: a large, accretive Camino acquisition structured to limit near-term balance sheet impact, record Q1 adjusted EBITDA ($287M) and a robust POP program ($101M cash proceeds). Management highlighted meaningful synergies (~$7M field / >$20M G&A), disciplined valuation (≈18% below peer average) and continued capital returns while improving pro forma leverage ~20% to 2.2x. Lowlights were limited: weather-related production impacts, ~$11M of transaction costs and gas-price friction, a sizable net debt balance (~$2.7B), and the fact that Camino’s PDP economics initially sit in an SPV (Diversified captures 40% residual cash flow until/if a buyout occurs). Overall, positives (large accretive deal, strong Q1 performance, clear synergies, disciplined capital allocation and substantial inventory) materially outweigh the noted challenges and execution/market risks.Positive Updates
Transformative Camino Acquisition with Innovative Financing
Announced acquisition (with Carlyle) of Camino assets valued at $1.175 billion; Diversified's cash consideration ~ $210 million (~20% of transaction value). Structure: SPV with 60% Carlyle / 40% Diversified, ABS debt at SPV level and equity-method accounting (off-balance-sheet for Diversified). Diversified retains 100% ownership of undeveloped acreage and will receive 40% of the SPV's residual cash flow plus management fees and potential promote.
Negative Updates
Weather‑Related Production Impacts
Production was negatively impacted in the quarter by Winter Storm Fern and other regional weather events; production volatility noted although exit rate remained in line with guidance.
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Q1-2026 Updates
Positive
Negative
Transformative Camino Acquisition with Innovative Financing
Announced acquisition (with Carlyle) of Camino assets valued at $1.175 billion; Diversified's cash consideration ~ $210 million (~20% of transaction value). Structure: SPV with 60% Carlyle / 40% Diversified, ABS debt at SPV level and equity-method accounting (off-balance-sheet for Diversified). Diversified retains 100% ownership of undeveloped acreage and will receive 40% of the SPV's residual cash flow plus management fees and potential promote.
Read all positive updates
Company Guidance
Diversified reiterated full‑year 2026 guidance: production of 1.17–1.21 MMcfe/d with a ~28% liquids / ~72% gas mix; adjusted EBITDA of $925–975 million; adjusted free cash flow of ≈$430 million; total capex of $205–235 million (non‑operated capex $135–155 million; maintenance capex $70–80 million); and a target net‑debt/EBITDA leverage range of 2.0x–2.5x — noting the recently closed Sheridan deal and the Camino transaction are not fully reflected in these guidance figures.Diversified Energy Company Financial Statement Overview
Summary
Income Statement
58
Neutral
Balance Sheet
67
Positive
Cash Flow
62
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 1.61B | 794.84M | 868.26M | 1.92B | 977.04M |
| Gross Profit | 411.59M | 109.45M | 203.16M | 1.25B | 515.35M |
| EBITDA | 923.82M | 170.18M | 1.36B | -476.50M | -332.69M |
| Net Income | 341.90M | -88.27M | 758.02M | -625.41M | -325.21M |
Balance Sheet | |||||
| Total Assets | 6.17B | 4.00B | 3.47B | 3.83B | 3.49B |
| Cash, Cash Equivalents and Short-Term Investments | 29.70M | 5.99M | 3.75M | 7.33M | 12.56M |
| Total Debt | 3.03B | 1.74B | 1.31B | 1.47B | 1.04B |
| Total Liabilities | 5.17B | 3.54B | 2.88B | 3.97B | 2.83B |
| Stockholders Equity | 984.06M | 452.68M | 585.81M | -152.69M | 647.41M |
Cash Flow | |||||
| Free Cash Flow | 280.02M | 293.56M | 335.88M | 301.69M | 270.01M |
| Operating Cash Flow | 464.62M | 345.66M | 410.13M | 387.76M | 320.18M |
| Investing Cash Flow | -820.17M | -272.92M | -239.37M | -386.46M | -625.87M |
| Financing Cash Flow | 448.40M | -70.51M | -174.34M | -6.54M | 316.87M |
Diversified Energy Company Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $1.21B | 17.52 | 21.80% | 12.53% | -2.97% | -33.78% | |
74 Outperform | $1.73B | 18.48 | 10.68% | 13.84% | 0.87% | 770.57% | |
67 Neutral | $933.86M | 2.77 | 40.22% | 8.02% | ― | ― | |
65 Neutral | $15.17B | 7.61 | 4.09% | 5.20% | 3.87% | -62.32% | |
50 Neutral | $2.11B | -3.07 | -29.09% | 8.18% | -6.81% | -197.47% | |
| ― | $144.95M | -193.14 | -61.04% | ― | -99.80% | -170.31% | |
| ― | $1.05B | 15.44 | 959.49% | 7.51% | -11.58% | -12.24% |
* Energy Sector Average
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.