The Diversified Energy (LSE: DEC) share price has fallen by 20% since early October and is down by around 12% so far this year. This weakness has left the US gas producer trading at under 100p and offering a 12% dividend yield.
A yield this high is unusual. In my experience it’s often a sign of problems to come. But Diversified’s payout has risen steadily since its flotation in 2017 and the company’s latest trading update didn’t seem to reveal any new problems. Is DEC an overlooked bargain I should buy for my portfolio?
What’s the story?
Diversified Energy is a slightly unusual business. The company operates around 69,000 gas producing wells in the USA, in states including Virginia, Pennsylvania and Ohio.
These wells are generally older wells that are past peak production. Diversified buys the wells from other operators and then runs them for cash until they reach the … Read more