We came across a bullish thesis on Diversified Energy Company on r/dividends by Leveraged_Lots. In this article, we will summarize the bulls’ thesis on DEC. Diversified Energy Company’s share was trading at $13.19 as of February 10th. DEC’s trailing and forward P/E were 4.19 and 4.66 respectively according to Yahoo Finance.
Diversified Energy Company is a distinctive independent energy producer focused on the later stages of the oil and natural gas lifecycle, acquiring mature, low-risk assets that have moved past their initial high-decline phase. This strategy creates a stable, utility-like production profile, with approximately 1.1 billion cubic feet equivalent per day from a broad portfolio concentrated in the Appalachian Basin and Central United States.
The company’s Smarter Asset Management (SAM) program serves as the operational backbone, transforming well decommissioning from a costly outsourced liability into a highly efficient, vertically integrated internal operation through its subsidiary, Next Level Energy. By plugging and retiring wells at roughly 50% of industry-average costs and offering external plugging services to states and other operators, the program generates both cost savings and new revenue streams while improving methane capture and production efficiency.
Regulatory certainty further strengthens the investment case: a long-standing 15-year agreement with Pennsylvania, and a landmark multi-state settlement covering six states, set a fixed roadmap for decommissioning 2,600 wells by 2034, capping environmental spending and eliminating tail-risk exposure. Corporate evolution, including re-domiciling to Delaware, a New York Stock Exchange listing, and the 2025 acquisition of Canvas Energy, has broadened geographic reach and investor access.
Financial resilience is bolstered by a disciplined hedging program covering 80% of production through 2026, ensuring predictable cash flow and supporting a quarterly dividend of $0.29 per share, while asset-backed debt enables self-deleveraging, with over $200 million of principal retired in 2025 alone. With these operational, regulatory, and financial advantages, Diversified Energy offers a resilient, cash-generating business trading at a notable discount to intrinsic value, presenting a compelling investment with limited downside and multiple catalysts for upside.
Previously, we covered a bullish thesis on Diversified Energy Company PLC (DEC) by The Oak Bloke in March 2025, which highlighted DEC’s stable cash flow from mature assets, strong free cash flow generation, accretive acquisitions, and operational efficiencies through NextLVL. DEC’s stock price has been flat since our coverage. Leveraged_Lots shares a similar bullish perspective but emphasizes DEC’s Smarter Asset Management program, regulatory certainty, and corporate evolution as key drivers of long-term resilience.
Diversified Energy Company is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 24 hedge fund portfolios held DEC at the end of the third quarter which was 21 in the previous quarter. While we acknowledge the risk and potential of DEC as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than DEC and that has 10,000% upside potential, check out our report about this cheapest AI stock.
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Disclosure: None.
