Comparing California Resources (NYSE:CRC) & Diversified Energy (NYSE:DEC)

Diversified Energy (NYSE:DEC) and California Resources (NYSE:CRC) are both energy companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, valuation, earnings, institutional ownership, risk, analyst recommendations and profitability.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Diversified Energy and California Resources, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Diversified Energy	0	2	7	1	2.90
California Resources	0	3	9	1	2.85

Diversified Energy currently has a consensus price target of $22.00, suggesting a potential upside of 49.50%. California Resources has a consensus price target of $74.44, suggesting a potential upside of 36.27%. Given Diversified Energy’s stronger consensus rating and higher probable upside, analysts plainly believe Diversified Energy is more favorable than California Resources.

Insider & Institutional Ownership

26.5% of Diversified Energy shares are held by institutional investors. Comparatively, 97.8% of California Resources shares are held by institutional investors. 2.9% of Diversified Energy shares are held by insiders. Comparatively, 0.5% of California Resources shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Volatility & Risk

Diversified Energy has a beta of -0.28, indicating that its stock price is 128% less volatile than the S&P 500. Comparatively, California Resources has a beta of 1.02, indicating that its stock price is 2% more volatile than the S&P 500.

Dividends

Diversified Energy pays an annual dividend of $1.16 per share and has a dividend yield of 7.9%. California Resources pays an annual dividend of $1.62 per share and has a dividend yield of 3.0%. Diversified Energy pays out 35.9% of its earnings in the form of a dividend. California Resources pays out -119.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. California Resources has increased its dividend for 1 consecutive years.

Profitability

This table compares Diversified Energy and California Resources’ 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
California Resources	-3.79%	9.82%	4.65%

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Diversified Energy	$1.83 billion	0.57	$341.11 million	$3.23	4.56
California Resources	$3.67 billion	1.32	$363.00 million	($1.36)	-40.17

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

Summary

California Resources beats Diversified Energy on 10 of the 16 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 California Resources

California Resources Corporation operates as an independent oil and natural gas exploration and production, and carbon management company in the United States. The company explores, produces, and markets crude oil, natural gas, and natural gas liquids for marketers, California refineries, and other purchasers that have access to transportation and storage facilities. It also engages in the generation and sale of electricity to the wholesale power market and utility sector; and developing various carbon capture and storage projects in California. The company was incorporated in 2014 and is based in Long Beach, California.