Head to Head Comparison: Anadarko Petroleum (NASDAQ:APC) versus Diversified Energy (NYSE:DEC)

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

Dividends

Diversified Energy pays an annual dividend of $1.16 per share and has a dividend yield of 7.5%. Anadarko Petroleum pays an annual dividend of $2.00 per share and has a dividend yield of 10.5%. Diversified Energy pays out 35.9% of its earnings in the form of a dividend. 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.

Institutional & Insider Ownership

26.5% of Diversified Energy shares are held by institutional investors. 2.9% of Diversified Energy shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Diversified Energy	$1.83 billion	0.60	$341.11 million	$3.23	4.78
Anadarko Petroleum	$5.58 billion	0.04	$32.73 million	$0.69	27.52

Diversified Energy has higher earnings, but lower revenue 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 Diversified Energy and Anadarko Petroleum’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
Anadarko Petroleum	N/A	N/A	N/A

Analyst Ratings

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

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

Diversified Energy presently has a consensus price target of $22.50, suggesting a potential upside of 45.82%. Anadarko Petroleum has a consensus price target of $21.80, suggesting a potential upside of 14.80%. Given Diversified Energy’s stronger consensus rating and higher possible upside, research analysts plainly believe Diversified Energy is more favorable than Anadarko Petroleum.

Summary

Diversified Energy beats Anadarko Petroleum on 9 of the 13 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 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.