Diversified Energy Share Discussion Threads

[podgyted] 17/1/2024 11:08

Presume it'll be kicked out of the FTSE 250 at the next rebalancing.

Down about 7% today MCap @ £458m.

[topazfrenzy] 17/1/2024 11:04

Added a few more to my SIPP lol

[fordtin] 17/1/2024 10:55

So far the current buyback program has used ~£9.8m of the authorised £97.4m and has cut ~£2.1m off the cost of the annual dividend (at current forex and dividend rate).

[topazfrenzy] 17/1/2024 10:51

They pay a huge dividend and are doing a buyback currently, not sure why people are complaining. There is no way the dividend should be increased but if it does then thank you whatever, I'll take it.

Buying back shares is what smart companies do if executed at the right time. Whether you like it or not is neither here nor there, it is always a good strategy to reduce the share count unless debt is out of control.

[mindthestash] 17/1/2024 10:47

we and the oak can rake over the numbers but the problem here is trust.

the numbers, and we'll get more shortly, say to me this runs hot and culturally from the ceo and board like/committed to max divi - ok with me

trust - people dont trust the numbers and dont trust the greenloons (widespead in media/politics and increasingly investment management) and regulators to put the boot in and destroy the model.

Im holding a large slice in my stash and inclined to buy more but i really hope they give max detail and explanation of future liquidity/viability on this divi and the next results report.

Otheriwise you aint seen nothing yet

[fordtin] 17/1/2024 10:46

Farrugia - re; "Dividends should be kept at about 10%."

Sounds like a sure-fire way to drive the share price down toward zero!

Investor A buys into a company offering 10% dividend.
Share price falls 10% due to wider market conditions.
Company cuts dividend to maintain 10% of prevailing share price.
Investor A sells and moves on because other companies offer a more stable return.
Investor B buys into the company offering a dividend equivalent to 10% of prevailing share price.
Share price falls 10% due to wider market conditions and weakened demand caused by dividend uncertainty.
Company cuts dividend to maintain 10% of prevailing share price.
Investor B sells and moves on because other companies offer a more stable return.
Investor C buys into the company attracted by the dividend equal to 10% of prevailing share price.
Share price falls 10% due to weakened demand caused by dividend uncertainty.
Company cuts dividend to maintain 10% of prevailing share price.
Investor C sells and moves on because other companies offer a more stable return.
Investor D .....and so on ...

Anyone still holding from the beginning will have seen their share value deteriorate toward zero as well as their dividend yield diminishing toward zero.

[1knocker] 17/1/2024 10:34

My portfolio is monotone this morning, though DEC is a darker shade of red in a sea of red.

The only good decisions I have made this year so far, are thinking about purchases and deciding o hold off !!

[lab305] 17/1/2024 10:19

fordtin you will know that I have been critical for over a year , since the first buyback abruptly stopped for no reason. I was stupid and should have sold then. It is absolutely incorrect to suggest that I have become more negative since I sold. Just read my posts after November 2022 there are plenty and all disgruntled !

[farrugia] 17/1/2024 10:18

i don't think buybacks help much. I don't even think dividends at 25% help in the long run. Dividends should be kept at about 10%. The rest of the capital should be kept on the balance sheet - that supports a 'minimum' stock price.

[kenmitch] 17/1/2024 10:05

topafrenzy.

Yes. Dividends are much better than buybacks for shareholders because they return real money to us.

You say eps go up. Not correct. eps can go DOWN when a Company buys back. e.g after collapse in profits.

The correct fact on eps is this; buybacks mean eps is higher than it would have been without buybacks.

I agree though that if Companies insist on going for (wasteful imo) buybacks, then it is far better to do them when the share looks to be be too low.

[kenmitch] 17/1/2024 10:04

topafrenzy.

Yes. Dividends are much better than buybacks for shareholders because they return real money to us.

You say eps go up. Not correct. eps can go DOWN when a Company buys back. e.g after collapse in profits.

The correct fact on eps is this; buybacks mean eps is higher than it would have been without buybacks.

I agree though that if Companies insist on going for (wasteful imo) buybacks, then it is far better to do them when the share looks to be be too low.

[topazfrenzy] 17/1/2024 10:00

As a shareholder you end up owning more of the company after a buyback when shares are cancelled, which is the case here. It's simple mathematics!

[parob] 17/1/2024 09:59

2nd batch in for me too :)

[loganair] 17/1/2024 09:58

DEC yesterday closed in the U.S. at around the equivalent of 1030p.

[topazfrenzy] 17/1/2024 09:56

The benefit of buybacks is that shares are reduced and dividend payouts are less for the company over time. If you do the buybacks when the share price is low it is the best thing you can do as earnings per share go up.

Dividends are good and of course they pay them here but once that money is gone it is gone.

[kenmitch] 17/1/2024 09:53

But (this question always goes unanswered) what’s is the benefit for shareholders. Buybacks do not overall benefit them imo. And it’s not just opinion. Time and again the facts show that.e.g for just one of hundreds of similar examples, what about ABDN who started buying back at £5 several years ago with relentless buying back ever since, and share now half that £5 price?

Here’s the DEC pre Christmas info on their biybacks. Average price of them was over £13. Share price now nearly 30% lower still at under £9.

2023

18 December 2023



Diversified Energy Company PLC

("Diversified" or the "Company")



Transaction in Own Shares



Diversified Energy Company PLC (LSE:DEC) announces that, in accordance with
the terms of its share buyback programme announced on 27 June 2023, the
Company has purchased 7,500 ordinary shares of 20 pence each in the capital of
the Company (the "Shares") in the market at a volume weighted average price of
1330.06 pence per Share through Stifel Nicolaus Europe Limited ("Stifel"). The
Shares acquired will, in due course, be cancelled.


So. What IS the benefit for shareholders?

[bountyhunter] 17/1/2024 09:43

Cancellation of the buy back shares is a positive - which is what they are doing - rather than handing out to directors from treasury at some future date which is what some companies do.

[bulltradept] 17/1/2024 09:42

"It’s a misconception that buybacks = higher share price."

Yes, certainly makes metrics look better, but as you state why should that help holders of the stock?

Surely better to give money back to those owners of the company?

[lawson27] 17/1/2024 09:40

Taken some @975, oversold imo, GLA

looks like the mm's did a smash and grab and took out a stop for those 3540 @968, we shall see

[scepticalinvestor] 17/1/2024 09:39

I agree - excellent quality but the mkt is currently against DEC.When it turns it will be an easy 50% upside imo - target in the regions of abt 1300p

[imnotspartacus] 17/1/2024 09:36

It’s hard not to pull the trigger but may be £9 is on the cards!

[scepticalinvestor] 17/1/2024 09:31

Less than 50p in old money. . .Looking to buy back in when its hits the low 9s.

[t 34] 17/1/2024 09:20

What is happening today is the effect to what happened on NYSE yesterday .

[fordtin] 17/1/2024 09:13

Lab – have you considered that you may be part of the problem?
You've said you sold a considerable holding, then campaigned for others to join you in selling into the share price weakness you helped create.
Perhaps you have influenced some shareholders and they've also contributed to the persistent dripping of shares into the market.

[kenmitch] 17/1/2024 09:12

Buybacks favour those who want to sell as there’s that willing buyer of their shares in DEC themselves. It’s a misconception that buybacks = higher share price. They don’t mean that. They do mean higher eps because there are fewer shares in issue, and if as is often the case, Director bonus pay is based on eps performance, then it benefits directors too. But what benefit is there from buybacks for the loyal shareholders?