Truist Securities Starts Diversified Energy Co. (DEC) at Buy

Truist Securities analyst Bertrand Donnes initiates coverage on Diversified Energy Co. (NYSE: DEC) with a Buy rating and a price target of $18.00.

The analyst comments "Diversified Energy is a small-cap, well-hedged natural gas focused company with a strong track record of shareholder returns, that recently started trading on the NYSE last December, but is known by most US energy focused investors. Due to its current foreign listing on the London Stock Exchange, relative lack of analyst coverage, and recent stock performance, if you are comfortable with some leverage we think this is an attractive entry point, particularly given its high FCF yield, ~8% fixed dividend, and its upcoming addition to the Russell 2000 on 7/1; we are initiating with an $18 PT and a Buy rating. Additionally, relative to its E&P peers, the company has a much lower base production decline (~10% y/y vs the group's 30-50%) as a result of its older vintage producing inventory and its operated workover program, versus the high-decline D&C activity others use to drive growth. Looking forward, Diversified has a track record of acquisitions, and we don't expect the company to remain on the sidelines as the swarm of M&A in the E&P space produces potential opportunities through accelerated non-core divestiture programs."

For an analyst ratings summary and ratings history on Diversified Energy Co. click here. For more ratings news on Diversified Energy Co. click here.

Shares of Diversified Energy Co. closed at $13.60 yesterday.

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