Diamondback Energy, Inc. (FANG) Stock Recommendation | Score, Valuation, Technicals & Financial Trend

Score

Click here to find our call on this stock

Strong Sell

Sell

Hold

Buy

Strong Buy

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Comparison

Company

Score

Quality

Valuation

Financial

Technical

EQT Corp.

Antero Resources Corp.

Devon Energy Corp.

Range Resources Corp.

ConocoPhillips

Pioneer Natural Resources Co.

Diamondback Energy, Inc.

Ovintiv, Inc.

EOG Resources, Inc.

Occidental Petroleum Corp.

Marathon Oil Corp.

Why is Diamondback Energy, Inc. ?

High Management Efficiency with a high ROCE of 18.11%

Company's ability to service its debt is strong with a healthy EBIT to Interest (avg) ratio of 26.78

Healthy long term growth as Net Sales has grown by an annual rate of 32.85% and Operating profit at 44.92%

RAW MATERIAL COST(Y) Grown by 29.9% (YoY)
INTEREST(Q) Highest at USD 56 MM
EPS(Q) Lowest at USD 2.38

With ROCE of 10.49%, it has a fair valuation with a 1.05 Enterprise value to Capital Employed

The stock is trading at a discount compared to its peers' average historical valuations
Over the past year, while the stock has generated a return of -18.12%, its profits have risen by 21.8%

High Institutional Holdings at 61.88%

These investors have better capability and resources to analyse fundamentals of companies than most retail investors.
Their stake has increased by 0.66% over the previous quarter.

Company is among the highest 1% of companies rated by MarketsMojo across all 4,000 stocks

Consistent Underperformance against the benchmark over the last 3 years

Along with generating -18.12% returns in the last 1 year, the stock has also underperformed S&P 500 in each of the last 3 annual periods

Real-Time Research Report

Verdict Report

How much should you hold?

Overall Portfolio exposure to Diamondback Energy, Inc. should be less than 10%
Overall Portfolio exposure to Oil should be less than 30%

(If sector exposure > 30%, please use optimiser tool to see which are the best stocks to hold in Oil)

When to exit? - We will constantly monitor the company and suggest at the appropriate time to exit from the stock

Is Diamondback Energy, Inc. for you?

Medium Risk, Low Return

Absolute

Risk Adjusted

Volatility

Diamondback Energy, Inc.

-9.25%

-0.62

38.80%

S&P 500

13.22%

0.61

20.17%

Quality

Management Risk

Growth

Capital Structure

Quality grade scale :

Below Average, Average, Good, Excellent

Quality key factors

Factor

Value

Sales Growth (5y)

32.85%

EBIT Growth (5y)

44.92%

EBIT to Interest (avg)

26.78

Debt to EBITDA (avg)

1.51

Net Debt to Equity (avg)

0.31

Sales to Capital Employed (avg)

0.31

Tax Ratio

18.27%

Dividend Payout Ratio

53.37%

Pledged Shares

Institutional Holding

61.88%

ROCE (avg)

18.11%

ROE (avg)

22.02%

Valuation

Valuation Scorecard

Valuation grade scale :

Very Risky, Risky, Very Expensive, Expensive, Fair, Attractive, Very Attractive

Valuation Key Factors

Factor

Value

P/E Ratio

Industry P/E

Price to Book Value

1.07

EV to EBIT

10.03

EV to EBITDA

6.05

EV to Capital Employed

1.05

EV to Sales

4.11

PEG Ratio

Dividend Yield

228.17%

ROCE (Latest)

10.49%

ROE (Latest)

11.09%

Technicals

Technical key factors

Indicator

Weekly

Monthly

MACD

Mildly Bullish

Bearish

RSI

No Signal

Bullish

Bollinger Bands

Bullish

Mildly Bearish

Moving Averages

Bullish (Daily)

KST

Bullish

Bearish

Dow Theory

Mildly Bullish

OBV

Mildly Bullish

No Trend

Technical Indicator Scale: Bearish, Mildly Bearish, Sideways, Mildly Bullish, Bullish Turned

Technical Movement

Analyse All Technical Factors

Financial Trend

Financial Trend Scorecard

Financial Trend scale:

Very Negative, Negative, Flat, Positive, Very Positive, Outstanding

12What is working for the Company

NET SALES(HY)

At USD 7,726 MM has Grown at 64.03%

OPERATING CASH FLOW(Y)

Highest at USD 7,582 MM

INVENTORY TURNOVER RATIO(HY)

Highest at 98.55 times

DEBTORS TURNOVER RATIO(HY)

Highest at 11.91 times

-6What is not working for the Company

RAW MATERIAL COST(Y)

Grown by 29.9% (YoY

INTEREST(Q)

Highest at USD 56 MM

EPS(Q)

Lowest at USD 2.38

Here's what is working for Diamondback Energy, Inc.

Net Sales

At USD 7,726 MM has Grown at 64.03%

Year on Year (YoY)

MOJO Watch

Near term sales trend is very positive

Net Sales (USD MM)

Operating Cash Flow

Highest at USD 7,582 MM

in the last three years

MOJO Watch

The company has generated higher cash revenues from business operations

Operating Cash Flows (USD MM)

Inventory Turnover Ratio

Highest at 98.55 times

in the last five Semi-Annual periods

MOJO Watch

Company has been able to sell its inventory faster

Inventory Turnover Ratio

Debtors Turnover Ratio

Highest at 11.91 times

in the last five Semi-Annual periods

MOJO Watch

Company has been able to sell its Debtors faster

Debtors Turnover Ratio

Depreciation

Highest at USD 1,266 MM

in the last five periods

MOJO Watch

The expenditure on assets done by the company may have gone into operation

Depreciation (USD MM)

Here's what is not working for Diamondback Energy, Inc.

Interest

At USD 56 MM has Grown at 40%

period on period (QoQ)

MOJO Watch

Rising interest cost signifies increased borrowings

Interest Paid (USD MM)

Interest

Highest at USD 56 MM

in the last five periods and Increased by 40% (QoQ)

MOJO Watch

Rising interest cost signifies increased borrowings

Interest Paid (USD MM)

EPS

Lowest at USD 2.38

in the last five periods

MOJO Watch

Declining profitability; company has created lower earnings for shareholders

EPS (USD)

Raw Material Cost

Grown by 29.9% (YoY)

MOJO Watch

The company's ability to pass on the cost of raw materials to customers has deteriorated; this may lead to a fall in profit margin

Raw Material Cost as a percentage of Sales