Critical Analysis: Diversified Energy (NYSE:DEC) vs. Greenfire Resources (NYSE:GFR)

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

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Greenfire Resources and Diversified Energy, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Greenfire Resources	0	0	1	0	3.00
Diversified Energy	0	0	2	0	3.00

Greenfire Resources currently has a consensus target price of $10.50, indicating a potential upside of 39.07%. Diversified Energy has a consensus target price of $19.50, indicating a potential upside of 22.37%. Given Greenfire Resources’ higher probable upside, analysts clearly believe Greenfire Resources is more favorable than Diversified Energy.

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Greenfire Resources	$500.71 million	1.05	-$100.50 million	$0.86	8.78
Diversified Energy	$868.26 million	0.88	$758.02 million	N/A	N/A

Diversified Energy has higher revenue and earnings than Greenfire Resources.

Institutional & Insider Ownership

88.9% of Greenfire Resources shares are held by institutional investors. Comparatively, 26.5% of Diversified Energy shares are held by institutional investors. 20.0% of Greenfire Resources shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Greenfire Resources	9.51%	12.70%	7.35%
Diversified Energy	N/A	N/A	N/A

Summary

Greenfire Resources beats Diversified Energy on 7 of the 10 factors compared between the two stocks.

About Greenfire Resources

Greenfire Resources Ltd., together with its subsidiaries, engages in the development, exploration, and operation of oil and gas properties in the Athabasca oil sands region of Alberta. The company operates the Tier-1 oil sands assets located in Western Canada. It utilizes steam-assisted gravity drainage (SAGD) extraction technology, a situ thermal oil recovery process to recover diluted and non- diluted bitumen. The company is headquartered in Calgary, Canada.

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.