MeritValue

Diversified Energy Co

DECdata completeness 100%5 fiscal years on file
The thesis, from the filings

Diversified Energy Co earns about -11% on invested capital, but has diluted owners by 88% over 5 years — worth asking whether the growth reaches owners. The cash-flow models don't apply cleanly here — the ledger says why below.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$1.01B1$1.92B2$1.95B3$757.3M3$1.83B3
Net income−$325.5M4−$625.4M5$748.7M6−$104.4M6$341.1M6
Operating cash flow$320.2M7$387.8M8$291.4M9$220.7M9$464.6M9
Capital expenditure——$74.3M10$52.1M10$184.6M10
Free cash flow (derived)——$217.2M9$168.6M9$280M9
Total debt—$1.5B11$1.32B12$4.94B13$5.67B13
Cash & equivalents$12.6M14$62.7M15$3.75M16$5.99M16$29.7M16
Diluted shares39.7M42.2M47.5M48.0M74.5M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$132.13
your share of equity
Profit it earned you last year
$45.8
Free cash flow it threw off
$37.6
Debt you’d be carrying
$760.95

10 shares is a claim on $132.13 of net worth that earned you $45.8 and generated $37.6 of cash last year, against $760.95 of debt.

iii. Is this a good business?
Moat signal · return on invested capital
-11% avg · 5y
FY21 -62%FY22 -45%FY23 46%FY24 -2%FY25 8%

It earned an average -11% on invested capital over 5 years. Compare that to what it costs to fund the business.

seeing a moat in the numbers →
Management signal · capital allocation
+88% shares · 5y

Share count is up 88% over 5 years — owners have been diluted. Worth asking what they got for it. Total debt has risen 278% over the same window.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0
DCF · Growth Exit 10Y
not applicable
negative equity value — refusing to publish per-share figure
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears10
  • fcfGrowth5.0%
  • fcfBase$217.2M
DCF · Growth Exit 5Y
not applicable
negative equity value — refusing to publish per-share figure
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears5
  • fcfGrowth5.0%
  • fcfBase$217.2M
Earnings Power Value
not applicable
normalized (5y-median) earnings non-positive — EPV undefined
Graham Number
$36.9
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

Sources — the receipts
  1. 20-F · period ending 2021-12-31 · accession 0001628280-24-011847 (Revenue)
  2. 20-F · period ending 2022-12-31 · accession 0001922446-25-000003 (Revenue)
  3. 10-K · period ending 2023-12-31 · accession 0001922446-26-000020 (Revenues)
  4. 20-F · period ending 2021-12-31 · accession 0001628280-24-011847 (ProfitLossAttributableToOwnersOfParent)
  5. 20-F · period ending 2022-12-31 · accession 0001922446-25-000003 (ProfitLossAttributableToOwnersOfParent)
  6. 10-K · period ending 2023-12-31 · accession 0001922446-26-000020 (NetIncomeLoss)
  7. 20-F · period ending 2021-12-31 · accession 0001628280-24-011847 (CashFlowsFromUsedInOperatingActivities)
  8. 20-F · period ending 2022-12-31 · accession 0001922446-25-000003 (CashFlowsFromUsedInOperatingActivities)
  9. 10-K · period ending 2023-12-31 · accession 0001922446-26-000020 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2023-12-31 · accession 0001922446-26-000020 (PaymentsToAcquirePropertyPlantAndEquipment)
  11. 20-F · period ending 2022-12-31 · accession 0001628280-24-011847 (Borrowings)
  12. 20-F · period ending 2023-12-31 · accession 0001922446-25-000003 (Borrowings)
  13. 10-K · period ending 2024-12-31 · accession 0001922446-26-000020 (LongTermDebtNoncurrent)
  14. 20-F · period ending 2021-12-31 · accession 0001922446-25-000003 (CashAndCashEquivalents)
  15. 10-K · period ending 2022-12-31 · accession 0001922446-26-000020 (CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalents)
  16. 10-K · period ending 2023-12-31 · accession 0001922446-26-000020 (CashAndCashEquivalentsAtCarryingValue)