Head-To-Head Analysis: Dorchester Minerals (NASDAQ:DMLP) vs. Diversified Energy (NYSE:DEC)

Diversified Energy (NYSE:DEC) and Dorchester Minerals (NASDAQ:DMLP) are both small-cap energy companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, earnings, valuation, risk, analyst recommendations, profitability and institutional ownership.

Dividends

Diversified Energy pays an annual dividend of $1.16 per share and has a dividend yield of 7.8%. Dorchester Minerals pays an annual dividend of $5.09 per share and has a dividend yield of 17.2%. Diversified Energy pays out 35.9% of its earnings in the form of a dividend. Dorchester Minerals pays out 289.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Volatility and Risk

Diversified Energy has a beta of -0.35, indicating that its share price is 135% less volatile than the S&P 500. Comparatively, Dorchester Minerals has a beta of 0.55, indicating that its share price is 45% less volatile than the S&P 500.

Insider & Institutional Ownership

26.5% of Diversified Energy shares are held by institutional investors. Comparatively, 19.2% of Dorchester Minerals shares are held by institutional investors. 2.9% of Diversified Energy shares are held by insiders. Comparatively, 5.9% of Dorchester Minerals shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Diversified Energy and Dorchester Minerals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Diversified Energy	N/A	N/A	N/A
Dorchester Minerals	45.45%	28.43%	27.83%

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Diversified Energy	$1.83 billion	0.57	$341.11 million	$3.23	4.58
Dorchester Minerals	$152.83 million	9.49	$55.25 million	$1.76	16.79

Diversified Energy has higher revenue and earnings than Dorchester Minerals. Diversified Energy is trading at a lower price-to-earnings ratio than Dorchester Minerals, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current ratings and price targets for Diversified Energy and Dorchester Minerals, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Diversified Energy	0	3	7	0	2.70
Dorchester Minerals	0	1	0	0	2.00

Diversified Energy currently has a consensus target price of $22.50, indicating a potential upside of 51.98%. Given Diversified Energy’s stronger consensus rating and higher probable upside, equities analysts plainly believe Diversified Energy is more favorable than Dorchester Minerals.

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.

About Dorchester Minerals

Dorchester Minerals, L.P. engages in the acquisition, ownership, and administration of royalty properties in the United States. Its royalty properties include producing and nonproducing mineral, royalty, overriding royalty, net profits, and leasehold interests in 593 counties and parishes in 28 states; and net profits interests represent net profits overriding royalty interests in various properties owned by the operating partnership. Dorchester Minerals Management LP serves as the general partner of Dorchester Minerals, L.P. The company was founded in 1982 and is based in Dallas, Texas.