Diversified Energy (NYSE:DEC) vs. Talos Energy (NYSE:TALO) Critical Analysis

Talos Energy (NYSE:TALO) and Diversified Energy (NYSE:DEC) are both small-cap oils/energy companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, earnings, profitability, analyst recommendations, risk, institutional ownership and dividends.

Earnings & Valuation

This table compares Talos Energy and Diversified Energy”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Talos Energy	$1.87 billion	0.93	$187.33 million	$0.54	17.83
Diversified Energy	$749.63 million	1.08	$758.02 million	N/A	N/A

Diversified Energy has lower revenue, but higher earnings than Talos Energy.

Insider and Institutional Ownership

89.3% of Talos Energy shares are owned by institutional investors. Comparatively, 26.5% of Diversified Energy shares are owned by institutional investors. 0.8% of Talos Energy shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Talos Energy and Diversified Energy, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Talos Energy	0	2	7	0	2.78
Diversified Energy	0	0	2	0	3.00

Talos Energy currently has a consensus price target of $16.28, suggesting a potential upside of 69.03%. Diversified Energy has a consensus price target of $19.50, suggesting a potential upside of 16.63%. Given Talos Energy’s higher probable upside, equities analysts plainly believe Talos Energy is more favorable than Diversified Energy.

Profitability

This table compares Talos Energy and Diversified Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Talos Energy	3.95%	-1.98%	-0.86%
Diversified Energy	N/A	N/A	N/A

Summary

Talos Energy beats Diversified Energy on 6 of the 11 factors compared between the two stocks.

About Talos Energy

Talos Energy Inc., through its subsidiaries, engages in the exploration and production of oil, natural gas, and natural gas liquids in the United States and Mexico. It also engages in the development of carbon capture and sequestration. Talos Energy Inc. was founded in 2011 and is headquartered in Houston, Texas.

About Diversified Energy

Diversified Energy Company PLC operates as an independent owner and operator of producing natural gas and oil wells primarily in the Appalachian Basin of the United States. The company is involved in the production, marketing, and transportation of natural gas, natural gas liquids, crude oil, and condensates. Its assets consist of natural gas wells and gathering systems located in the states of Tennessee, Kentucky, Virginia, West Virginia, Ohio, Pennsylvania, Oklahoma, Texas, and Louisiana. The company was formerly known as Diversified Gas & Oil PLC and changed its name to Diversified Energy Company PLC in May 2021. Diversified Energy Company PLC was founded in 2001 and is headquartered in Birmingham, Alabama.