Critical Analysis: Berry (NASDAQ:BRY) versus Diversified Energy (NYSE:DEC)

Berry (NASDAQ:BRYGet Free Report) and Diversified Energy (NYSE:DECGet Free Report) are both small-cap oils/energy companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, analyst recommendations, valuation, profitability, institutional ownership, risk and earnings.

Insider and Institutional Ownership

94.9% of Berry shares are owned by institutional investors. Comparatively, 26.5% of Diversified Energy shares are owned by institutional investors. 1.0% of Berry shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Profitability

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

Net Margins Return on Equity Return on Assets
Berry 4.14% 5.27% 2.50%
Diversified Energy N/A N/A N/A

Analyst Recommendations

This is a breakdown of current ratings for Berry and Diversified Energy, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Berry 0 2 0 0 2.00
Diversified Energy 0 0 0 0 N/A

Berry presently has a consensus target price of $8.00, indicating a potential downside of 0.62%. Given Berry’s higher probable upside, equities analysts clearly believe Berry is more favorable than Diversified Energy.

Dividends

Berry pays an annual dividend of $0.48 per share and has a dividend yield of 6.0%. Diversified Energy pays an annual dividend of $0.17 per share and has a dividend yield of 1.4%. Berry pays out 104.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Berry has raised its dividend for 1 consecutive years. Berry is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation and Earnings

This table compares Berry and Diversified Energy’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Berry $903.46 million 0.68 $37.40 million $0.46 17.50
Diversified Energy $868.26 million 0.67 N/A N/A N/A

Berry has higher revenue and earnings than Diversified Energy.

Summary

Berry beats Diversified Energy on 10 of the 11 factors compared between the two stocks.

About Berry

(Get Free Report)

Berry Petroleum Company, LLC., formerly Berry Petroleum Company, is an independent energy company. The Company is engaged in the production, development, exploitation, and acquisition of oil and natural gas. The Company’s principal reserves and producing properties are located in California (South Midway-Sunset (SMWSS)-Steam Floods, North Midway-Sunset (NMWSS)-Diatomite, NMWSS-New Steam Floods, Texas (Permian and E. Texas), Utah (Uinta) and Colorado (Piceance). The Company’s operations are conducted in the continental United States. In December 2013, Linn Energy LLC and Linn Co, LLC (Linn Co) announced the completion of the merger between LinnCo and Berry Petroleum Company (Berry), where LinnCo had acquired all of Berry’s interest.

About Diversified Energy

(Get Free Report)

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.

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