Patterson-UTI Energy (NASDAQ: PTEN) and Helmerich & Payne (NYSE:HP) are both mid-cap oils/energy companies, but which is the superior stock? We will compare the two businesses based on the strength of their risk, earnings, profitability, institutional ownership, dividends, analyst recommendations and valuation.
Institutional & Insider Ownership
95.0% of Patterson-UTI Energy shares are owned by institutional investors. 4.6% of Patterson-UTI Energy shares are owned by insiders. Comparatively, 4.2% of Helmerich & Payne shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Risk & Volatility
Patterson-UTI Energy has a beta of 1.04, suggesting that its share price is 4% more volatile than the S&P 500. Comparatively, Helmerich & Payne has a beta of 1.26, suggesting that its share price is 26% more volatile than the S&P 500.
This table compares Patterson-UTI Energy and Helmerich & Payne’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Helmerich & Payne||-11.19%||-3.37%||-2.24%|
Patterson-UTI Energy pays an annual dividend of $0.08 per share and has a dividend yield of 0.4%. Helmerich & Payne pays an annual dividend of $2.80 per share and has a dividend yield of 4.9%. Patterson-UTI Energy pays out -5.2% of its earnings in the form of a dividend. Helmerich & Payne pays out -167.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Helmerich & Payne has raised its dividend for 44 consecutive years. Helmerich & Payne is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This is a summary of recent recommendations for Patterson-UTI Energy and Helmerich & Payne, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Helmerich & Payne||8||12||3||0||1.78|
Patterson-UTI Energy currently has a consensus price target of $27.05, suggesting a potential upside of 29.42%. Helmerich & Payne has a consensus price target of $53.95, suggesting a potential downside of 5.15%. Given Patterson-UTI Energy’s stronger consensus rating and higher probable upside, analysts plainly believe Patterson-UTI Energy is more favorable than Helmerich & Payne.
Earnings and Valuation
This table compares Patterson-UTI Energy and Helmerich & Payne’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|Patterson-UTI Energy||$915.87 million||5.08||-$318.63 million||($1.55)||-13.49|
|Helmerich & Payne||$1.62 billion||3.80||-$56.82 million||($1.67)||-34.06|
Helmerich & Payne has higher revenue and earnings than Patterson-UTI Energy. Helmerich & Payne is trading at a lower price-to-earnings ratio than Patterson-UTI Energy, indicating that it is currently the more affordable of the two stocks.
Helmerich & Payne beats Patterson-UTI Energy 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 Helmerich & Payne
Helmerich & Payne, Inc. is engaged in contract drilling of oil and gas wells for others. The Company operates in the contract drilling industry. The Company’s contract drilling business consists of three segments: U.S. Land, Offshore and International Land. The Company is also engaged in the ownership, development and operation of commercial real estate and the research and development of rotary steerable technology. Its real estate investments are located within Tulsa, Oklahoma, and include a shopping center containing approximately 441,000 leasable square feet, multi-tenant industrial warehouse properties containing approximately one million leasable square feet and approximately 210 acres of undeveloped real estate. The Company provides drilling rigs, equipment, personnel and camps on a contract basis. The Company’s subsidiaries include Helmerich & Payne International Drilling Co. and Helmerich & Payne de Venezuela, C.A.
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