Head-To-Head Review: Talos Energy (NYSE:TALO) versus Diversified Energy (NYSE:DEC)

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

Profitability

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

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

Institutional & Insider Ownership

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

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Talos Energy	$1.87 billion	0.97	$187.33 million	$0.54	18.65
Diversified Energy	$749.63 million	1.13	$758.02 million	N/A	N/A

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

Analyst Ratings

This is a summary of recent ratings and recommmendations for Talos Energy and Diversified Energy, as reported by MarketBeat.

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

Talos Energy currently has a consensus price target of $16.28, indicating a potential upside of 61.65%. Diversified Energy has a consensus price target of $19.50, indicating a potential upside of 11.36%. Given Talos Energy’s higher probable upside, analysts clearly believe Talos Energy is more favorable than Diversified Energy.

Summary

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

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.

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.