Analyzing Diversified Energy (NYSE:DEC) and Cheniere Energy Partners (NYSE:CQP)

Cheniere Energy Partners (NYSE:CQP) and Diversified Energy (NYSE:DEC) are both energy companies, but which is the superior business? We will contrast the two companies based on the strength of their earnings, analyst recommendations, dividends, risk, institutional ownership, profitability and valuation.

Risk and Volatility

Cheniere Energy Partners has a beta of 0.4, indicating that its share price is 60% less volatile than the S&P 500. Comparatively, Diversified Energy has a beta of 0.5, indicating that its share price is 50% less volatile than the S&P 500.

Profitability

This table compares Cheniere Energy Partners and Diversified Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Cheniere Energy Partners	22.54%	-591.00%	13.64%
Diversified Energy	N/A	N/A	N/A

Dividends

Cheniere Energy Partners pays an annual dividend of $3.10 per share and has a dividend yield of 5.8%. Diversified Energy pays an annual dividend of $1.16 per share and has a dividend yield of 8.2%. Cheniere Energy Partners pays out 80.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Diversified Energy pays out 78.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Diversified Energy is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cheniere Energy Partners	$10.31 billion	2.52	$2.51 billion	$3.84	13.99
Diversified Energy	$794.84 million	N/A	-$88.27 million	$1.47	9.63

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

Institutional & Insider Ownership

46.5% of Cheniere Energy Partners shares are held by institutional investors. Comparatively, 26.5% of Diversified Energy shares are held by institutional investors. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of current recommendations for Cheniere Energy Partners and Diversified Energy, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cheniere Energy Partners	5	1	0	0	1.17
Diversified Energy	1	0	5	0	2.67

Cheniere Energy Partners presently has a consensus price target of $54.20, indicating a potential upside of 0.86%. Diversified Energy has a consensus price target of $21.00, indicating a potential upside of 48.33%. Given Diversified Energy’s stronger consensus rating and higher possible upside, analysts plainly believe Diversified Energy is more favorable than Cheniere Energy Partners.

About Cheniere Energy Partners

Cheniere Energy Partners, L.P., through its subsidiaries, provides liquefied natural gas (LNG) to integrated energy companies, utilities, and energy trading companies worldwide. The company owns and operates natural gas liquefaction and export facility at the Sabine Pass LNG Terminal located in Cameron Parish, Louisiana. It also owns a natural gas supply pipeline that interconnects the Sabine Pass LNG terminal with various interstate pipelines. The company was founded in 2003 and is headquartered in Houston, Texas. Cheniere Energy Partners, L.P. is a subsidiary of Cheniere Energy, Inc.

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.