Diversified Energy Company PLC: Why This Stock Could Soar 60%
July 28, 2025
DEC Stock UP 46% Since April
There are many takeaways from the Israeli attack on Iran and eventual U.S. involvement. One big one is how big the need for reliable, domestic U.S. crude oil and gas is. Or, at the very least, the need for crude oil imports from safe trading partners.
Canada is the largest source of U.S. crude oil imports at 52%, with Mexico a distant second at 11%. Saudi Arabia and Iraq are the third and fourth largest sources of crude imports, accounting for a combined nine percent of total imports. (Source: “How much petroleum does the United States import and export?,” U.S. Energy Information Administration, last accessed July 8, 2025.)
Disruptions in the Middle East should be a wakeup call for the U.S. to curb oil and gas imports from countries with dubious political and human rights track records.
That should help put American energy stocks like Diversified Energy Company PLC (NYSE:DEC) in the spotlight.
Birmingham-Alabama-based Diversified Energy Company produces, transports, and markets primarily natural gas and natural gas liquids from existing assets in the Appalachian and Central regions.
The company has 842 millions of barrels of oil equivalent (MMboe) of proved reserves, with daily production of 141 thousand barrels of oil equivalent (Mboepd). It’s always growing, too. Since its 2017 initial public offering, Diversified Energy has closed on 24 acquisitions worth a combined $2.6 billion. (Source: “Investor Presentation June 2025,” Diversified Energy Company PLC, June 2, 2025.)
This past March, the company completed the previously announced $1.27-billion acquisition of Maverick Natural Resources. Maverick has current production of approximately 350 million cubic feet (MMcf/d) per day of natural gas equivalent, with annual free cash flow (FCF) of roughly $125.0 million and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $380.0 million. (Source: “Diversified Expands Asset Base, Density, and Commodity Mix with Acquisition of Liquids Rich Maverick Natural Resources,” Diversified Energy Company PLC, January 27, 2025.)
Diversified Energy Company PLC See Strong First-Quarter Results
The company reported first-quarter total revenue of $294.63 million, a 36.5% increase over $215.69 million in the same prior-year period. (Source: “Diversified Energy Reports Strong First Quarter 2025 Results Driven by Increased Top-Line Revenue Generation and Operational Discipline,” Diversified Energy Company PLC, May 12, 2025.)
Diversified Energy reported operating cash flow of $132.0 million, FCF of $62.0 million, and a net loss of $337.0 million, inclusive of non-cash unsettled derivative adjustments. Adjusted EBITDA increased 35% to $138.1 million.
During the quarter, the company also strengthened its balance sheet, increased liquidity, and retired $51.0 million in debt principal through amortizing debt payments.
Commenting on the results, Rusty Hutson, Jr., Diversified Energy’s chief executive officer, said, “Diversified is off to a great start in 2025, demonstrating the resilience of our business model in an otherwise volatile business environment while advancing our long-term strategy with the transformational acquisition of Maverick Natural Resources.
“Despite the broader macroeconomic and geopolitical challenges, we delivered solid operational results and continued growth in free cash flow.”
First-Quarter Dividend of $0.29/Share
Dividends are a big part of Diversified Energy’s business plan. In the first quarter of 2025, the company returned over $59.0 million to its shareholders through dividends and share repurchases. (Source: “Diversified Energy Announces First Quarter Dividend,” Diversified Energy Company PLC, May 12, 2025.)
In May, Diversified Energy announced a dividend of $0.29 per share, or $1.16 per share on an annual basis, for a forward dividend yield of approximately eight percent.
DEC Stock Has 60% Upside Potential
DEC stock has been on a bit of a rollercoaster ride over the last 18 months. Most recently, in early April, the stock took a hit after President Donald Trump announced “Liberation Day” and unveiled his global tariff policies.
Fears of a global trade war sent global stocks tumbling. But two tariff pauses have provided investors with some optimism, so stocks have been rebounding. Since bottoming in early April, DEC has more than erased all of those losses, climbing 46%.
Despite the big near-term share price gains, Wall Street thinks more is in store for the stock. Thanks to strong demand for natural gas, analysts have provided a 12-month share price target range of $17.50 to $23.00. This points to potential upside of approximately 21% to 60%.
Should DEC hit $23.00, this would put it within striking distance of its August 2022 record high of $24.82.
Chart courtesy of StockCharts.com
The Lowdown on Diversified Energy Company PLC
Diversified Energy Company PLC is an energy company focused on natural gas and natural gas liquids related to its U.S. onshore upstream and midstream assets. It reported strong first-quarter results, strengthened its balance sheet with $451.0 million of liquidity, and closed on the transformational acquisition of Maverick Natural Resources, a move that will double revenue and FCF.
Moreover, DEC has returned $59.0 million to shareholders: $19.0 million in share repurchases and over $40.0 million in dividends. Wall Street analysts believe that the stock could rally as much as 60% over the coming quarters.
That’s positive news for the 234 institutions that hold 59.86% of all outstanding shares. Three of the biggest holders include The Vanguard Group, BlackRock Inc, and Goldman Sachs Group Inc. (Source: “Diversified Energy Company PLC (DEC),” Yahoo! Finance, last accessed July 9, 2025.)
An impressive 24.96% of all outstanding DEC shares are held by insiders. This kind of skin in the game should motivate management to see the company perform well.
