Patterson-UTI Energy (NASDAQ: PTEN) and Seadrill Limited (NYSE:SDRL) are both oils/energy companies, but which is the superior stock? We will compare the two businesses based on the strength of their valuation, institutional ownership, profitability, analyst recommendations, earnings, dividends and risk.
This is a summary of current ratings and price targets for Patterson-UTI Energy and Seadrill Limited, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Patterson-UTI Energy presently has a consensus target price of $27.55, indicating a potential upside of 69.51%. Given Patterson-UTI Energy’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Patterson-UTI Energy is more favorable than Seadrill Limited.
Institutional and Insider Ownership
86.1% of Patterson-UTI Energy shares are owned by institutional investors. Comparatively, 27.8% of Seadrill Limited shares are owned by institutional investors. 4.6% of Patterson-UTI Energy shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Volatility & Risk
Patterson-UTI Energy has a beta of 0.94, meaning that its stock price is 6% less volatile than the S&P 500. Comparatively, Seadrill Limited has a beta of 2.66, meaning that its stock price is 166% more volatile than the S&P 500.
Earnings and Valuation
This table compares Patterson-UTI Energy and Seadrill Limited’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Patterson-UTI Energy||$1.34 billion||2.57||$260.21 million||($1.97)||-8.25|
|Seadrill Limited||$2.65 billion||0.06||$1.44 billion||($0.38)||-0.79|
Seadrill Limited has higher revenue and earnings than Patterson-UTI Energy. Patterson-UTI Energy is trading at a lower price-to-earnings ratio than Seadrill Limited, indicating that it is currently the more affordable of the two stocks.
Patterson-UTI Energy pays an annual dividend of $0.08 per share and has a dividend yield of 0.5%. Seadrill Limited does not pay a dividend. Patterson-UTI Energy pays out -4.1% of its earnings in the form of a dividend. Patterson-UTI Energy has raised its dividend for 7 consecutive years.
This table compares Patterson-UTI Energy and Seadrill Limited’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Patterson-UTI Energy beats Seadrill Limited on 9 of the 16 factors compared between the two stocks.
About Patterson-UTI Energy
Patterson-UTI Energy, Inc. is an oilfield services company. The Company owns and operates a fleet of land-based drilling rigs and a fleet of pressure pumping equipment in the United States. The Company’s segments include Contract Drilling, Pressure Pumping and Other operations. The Contract Drilling segment markets its contract drilling services to independent and other oil and natural gas operators. As of December 31, 2016, the Company had 202 marketed land-based drilling rigs. The Pressure Pumping segment provides pressure pumping services to oil and natural gas operators primarily in Texas (Southwest Region) and the Appalachian region (Northeast Region). The Other operations segment includes the Company’s pipe handling components and related technology business, the oil and natural gas working interests and the Middle East/North Africa business. In addition, the Company owns and invests in oil and natural gas assets as a non-operating working interest owner in Texas and New Mexico.
About Seadrill Limited
Seadrill Limited is an offshore drilling contractor providing offshore drilling services to the oil and gas industry. The Company’s primary business is the ownership and operation of drillships, semi-submersible rigs and jack-up rigs for operations in shallow-, mid-, deep-, and ultra deepwater areas, and in benign and harsh environments. The Company’s segments are Floaters and Jack-ups. The Company offers services encompassing drilling, completion and maintenance of offshore exploration and production wells. The Company contracts its drilling units primarily on a dayrate basis to drill wells for its customers. The Company has a fleet of approximately 38 offshore drilling units consisting of over 12 semi-submersible rigs, approximately seven drillships and over 19 jack-up rigs in operation, and contracts for the construction of approximately 13 offshore drilling units. The Company also provides management services to certain unconsolidated companies in which its holds investments.
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