Talos Energy (NYSE:TALO) vs. Diversified Energy (NYSE:DEC) Head-To-Head Contrast

On January 3rd, 2025, Talos Energy (NYSE:TALO) and Diversified Energy (NYSE:DEC) were evaluated as two small-cap energy companies. Investors often wonder which of these companies serves as a better investment opportunity. This evaluation will examine various factors such as risk, institutional ownership, analyst recommendations, profitability, valuation, dividends, and earnings.

Insider and Institutional Ownership

Talos Energy has a significant institutional ownership, with 89.3% of its shares held by large investors. In contrast, only 26.5% of Diversified Energy's shares are owned by institutional investors. Additionally, Talos Energy has 0.8% of its shares in the hands of company insiders. High levels of institutional ownership can indicate that major investors expect a company to achieve long-term growth.

Analyst Recommendations

The following summarizes current ratings and price targets for both Talos Energy and Diversified Energy, as presented 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

Currently, Talos Energy holds a consensus target price of $16.28, indicating a potential upside of 61.65%, while Diversified Energy shows a target price of $19.50 with a potential upside of 11.36%. These figures suggest that analysts view Talos Energy as a more favorable investment based on its higher probable upside.

Profitability

Examining the profitability metrics of both companies provides further insights:

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

For net margins, Talos Energy demonstrates a positive figure of 3.95%, while details for Diversified Energy remain unavailable.

Earnings and Valuation

Looking into the earnings and valuation of both companies, we can compare:

	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 gross revenue compared to Talos Energy but reports higher net income. This discrepancy highlights differing business strategies and market positions.

Conclusion

Based on the analysis across various parameters, Talos Energy outperforms Diversified Energy in six out of eleven categories assessed.

About Talos Energy

Talos Energy Inc. specializes in the exploration and production of oil, natural gas, and natural gas liquids primarily in the United States and Mexico. The company also invests in carbon capture and sequestration technologies. Founded in 2011, Talos Energy is headquartered in Houston, Texas.

About Diversified Energy

Diversified Energy Company PLC operates as an independent owner and operator of natural gas and oil wells mainly in the Appalachian Basin. The company is involved in the production, transportation, and marketing of natural gas and crude oil. With operations across multiple states, Diversified Energy's assets consist of several natural gas wells and gathering systems. Established in 2001, it was previously known as Diversified Gas & Oil PLC before rebranding in May 2021 and is based in Birmingham, Alabama.

energy, investment, analysis