Head-To-Head Contrast: Diversified Energy (NYSE:DEC) & Anadarko Petroleum (NASDAQ:APC)

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

Analyst Recommendations

This is a breakdown of current recommendations for Anadarko Petroleum and Diversified Energy, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Anadarko Petroleum	2	1	3	1	2.43
Diversified Energy	0	3	7	0	2.70

Anadarko Petroleum presently has a consensus price target of $21.80, suggesting a potential upside of 15.22%. Diversified Energy has a consensus price target of $22.50, suggesting a potential upside of 51.98%. Given Diversified Energy’s stronger consensus rating and higher probable upside, analysts plainly believe Diversified Energy is more favorable than Anadarko Petroleum.

Dividends

Anadarko Petroleum pays an annual dividend of $2.00 per share and has a dividend yield of 10.6%. Diversified Energy pays an annual dividend of $1.16 per share and has a dividend yield of 7.8%. Anadarko Petroleum pays out 289.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Diversified Energy pays out 35.9% of its earnings in the form of a dividend.

Institutional and Insider Ownership

26.5% of Diversified Energy shares are owned by institutional investors. 2.9% of Diversified Energy shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Anadarko Petroleum and Diversified Energy”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Anadarko Petroleum	$5.58 billion	0.04	$32.73 million	$0.69	27.42
Diversified Energy	$1.83 billion	0.57	$341.11 million	$3.23	4.58

Diversified Energy has lower revenue, but higher earnings than Anadarko Petroleum. Diversified Energy is trading at a lower price-to-earnings ratio than Anadarko Petroleum, indicating that it is currently the more affordable of the two stocks.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Anadarko Petroleum	N/A	N/A	N/A
Diversified Energy	N/A	N/A	N/A

Summary

Diversified Energy beats Anadarko Petroleum on 9 of the 13 factors compared between the two stocks.

About Anadarko Petroleum

Anadarko Petroleum Corporation engages in the exploration, development, production, and marketing of oil and gas properties. It operates through three segments: Exploration and Production, WES Midstream, and Other Midstream. The company explores for and produces oil, natural gas, and natural gas liquids (NGLs). It is also involved in gathering, processing, treating, and transporting oil, natural-gas, and NGLs production, as well as the gathering and disposal of produced water. The company's oil and natural gas properties are located in the United States onshore and deepwater Gulf of Mexico; and Algeria, Ghana, Mozambique, Colombia, Peru, and other countries. As of December 31, 2018, it had approximately 1.5 billion barrels of oil equivalent of proved reserves. The company was founded in 1959 and is headquartered in The Woodlands, 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.