Contrasting Talos Energy (NYSE:TALO) and Diversified Energy (NYSE:DEC)

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

Institutional and Insider Ownership

26.5% of Diversified Energy shares are held by institutional investors. Comparatively, 89.3% of Talos Energy shares are held by institutional investors. 0.8% of Talos Energy shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

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

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

Analyst Ratings

This is a summary of current ratings and target prices for Diversified Energy and Talos Energy, as reported by MarketBeat.

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

Diversified Energy presently has a consensus price target of $19.50, indicating a potential upside of 13.70%. Talos Energy has a consensus price target of $16.28, indicating a potential upside of 59.90%. Given Talos Energy’s higher probable upside, analysts clearly believe Talos Energy is more favorable than Diversified Energy.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Diversified Energy	$749.63 million	1.10	$758.02 million	N/A	N/A
Talos Energy	$1.87 billion	0.98	$187.33 million	$0.54	18.85

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

Summary

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

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.

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.