Critical Analysis: Permianville Royalty Trust (NYSE:PVL) and Diversified Energy (NYSE:DEC)

Diversified Energy (NYSE:DEC) and Permianville Royalty Trust (NYSE:PVL) are both small-cap oils/energy companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, risk, earnings, analyst recommendations, valuation, institutional ownership and profitability.

Profitability

This table compares Diversified Energy and Permianville Royalty Trust’s 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
Permianville Royalty Trust	22.92%	17.89%	17.86%

Earnings and Valuation

This table compares Diversified Energy and Permianville Royalty Trust’s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Diversified Energy	$868.26 million	0.75	$758.02 million	N/A	N/A
Permianville Royalty Trust	$45.21 million	0.76	$10.60 million	$0.30	3.46

Diversified Energy has higher revenue and earnings than Permianville Royalty Trust.

Institutional and Insider Ownership

26.5% of Diversified Energy shares are held by institutional investors. Comparatively, 6.8% of Permianville Royalty Trust shares are held by institutional investors. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Diversified Energy and Permianville Royalty Trust, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Diversified Energy	0	0	1	0	3.00
Permianville Royalty Trust	0	0	0	0	N/A

Diversified Energy presently has a consensus target price of $18.00, indicating a potential upside of 33.43%. Given Diversified Energy’s higher probable upside, equities analysts plainly believe Diversified Energy is more favorable than Permianville Royalty Trust.

Summary

Diversified Energy beats Permianville Royalty Trust on 5 of the 9 factors compared between the two stocks.

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 Permianville Royalty Trust

Permianville Royalty Trust operates as a statutory trust. It is involved in the acquisition and holding of net profits interest representing the right to receive 80% of the net profits from the sale of oil and natural gas production from properties located in the states of Texas, Louisiana, and New Mexico. The company was formerly known as Enduro Royalty Trust and changed its name to Permianville Royalty Trust in September 2018. Permianville Royalty Trust was incorporated in 2011 and is based in Houston, Texas.