Parker Drilling (NYSE: PKD) and Transocean Partners (NYSE:RIGP) are both oils/energy companies, but which is the superior business? We will compare the two companies based on the strength of their valuation, earnings, dividends, institutional ownership, profitability, analyst recommendations and risk.
Earnings & Valuation
This table compares Parker Drilling and Transocean Partners’ revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Parker Drilling||$399.09 million||0.40||$29.23 million||($1.30)||-0.88|
Transocean Partners pays an annual dividend of $1.45 per share and has a dividend yield of 8.1%. Parker Drilling does not pay a dividend. Transocean Partners pays out 70.0% of its earnings in the form of a dividend. Transocean Partners has raised its dividend for 2 consecutive years.
This is a summary of recent ratings and recommmendations for Parker Drilling and Transocean Partners, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Parker Drilling presently has a consensus price target of $3.67, indicating a potential upside of 218.84%. Transocean Partners has a consensus price target of $18.00, indicating a potential upside of 0.95%. Given Parker Drilling’s higher possible upside, analysts plainly believe Parker Drilling is more favorable than Transocean Partners.
This table compares Parker Drilling and Transocean Partners’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Institutional and Insider Ownership
65.5% of Parker Drilling shares are held by institutional investors. Comparatively, 29.0% of Transocean Partners shares are held by institutional investors. 3.6% of Parker Drilling shares are held by company insiders. Comparatively, 0.1% of Transocean Partners shares are held by company 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.
Risk & Volatility
Parker Drilling has a beta of 1.47, meaning that its stock price is 47% more volatile than the S&P 500. Comparatively, Transocean Partners has a beta of 1.68, meaning that its stock price is 68% more volatile than the S&P 500.
Transocean Partners beats Parker Drilling on 8 of the 14 factors compared between the two stocks.
About Parker Drilling
Parker Drilling Company (Parker Drilling) is a provider of contract drilling, and drilling-related services and rental tools and services. The Company’s business consists of two business lines: drilling services and rental tools services. Its Rental Tools Services business includes U.S. Rental Tools and International Rental Tools segments, and its Drilling Services business includes its U.S. (Lower 48) Drilling, and International & Alaska Drilling segments. In its Drilling Services business, the Company drills oil and gas wells for customers in both the United States and international markets. In its Rental Tools Services business, the Company provides rental equipment and services to exploration and production (E&P) companies, drilling contractors and service companies on land and offshore in the United States and select international markets. As of December 31, 2016, the Company had operations in 20 countries.
About Transocean Partners
Transocean Partners LLC a limited liability company. The Company is formed by Transocean Partners Holdings Limited and a subsidiary of Transocean Ltd. (Transocean), to own, operate and acquire advanced offshore drilling rigs. The Company’s assets consist of over 50% ownership interest in each of the entities that owns and operates over three ultra-deepwater drilling rigs that are operating in the U.S. Gulf of Mexico, which include Discoverer Clear Leader, Discoverer Inspiration and Development Driller III. The Company owns or has partial ownership interests in, and operated over 60 mobile offshore drilling units, including approximately 30 ultra-deepwater floaters, over seven harsh environment floaters, approximately five deepwater floaters, over 10 midwater floaters and approximately 10 high-specification jackups. Transocean also has approximately six ultra-deepwater drillships and over five high-specification jackups under construction.
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