Critical Review: Precision Drilling Corporation (PDS) & Seadrill (SDRL)
Precision Drilling Corporation (NYSE: PDS) and Seadrill (NASDAQ:SDRL) are both small-cap oils/energy companies, but which is the better business? We will compare the two companies based on the strength of their dividends, analyst recommendations, valuation, profitability, earnings, institutional ownership and risk.
This table compares Precision Drilling Corporation and Seadrill’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Precision Drilling Corporation||-12.38%||-7.10%||-3.22%|
Insider and Institutional Ownership
61.5% of Precision Drilling Corporation shares are owned by institutional investors. 1.0% of Precision Drilling Corporation shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
This is a breakdown of recent ratings for Precision Drilling Corporation and Seadrill, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Precision Drilling Corporation||0||7||7||1||2.60|
Precision Drilling Corporation presently has a consensus target price of $6.28, indicating a potential upside of 118.82%. Seadrill has a consensus target price of $1.00, indicating a potential upside of 322.65%. Given Seadrill’s higher possible upside, analysts clearly believe Seadrill is more favorable than Precision Drilling Corporation.
Valuation and Earnings
This table compares Precision Drilling Corporation and Seadrill’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Precision Drilling Corporation||$884.52 million||0.95||$197.10 million||($0.35)||-8.20|
|Seadrill||$2.37 billion||0.05||$1.15 billion||N/A||N/A|
Seadrill has higher revenue and earnings than Precision Drilling Corporation.
Precision Drilling Corporation beats Seadrill on 7 of the 12 factors compared between the two stocks.
Precision Drilling Corporation Company Profile
Precision Drilling Corporation (Precision) is an oilfield services company. The Company provides onshore drilling and completion and production services to exploration and production companies in the oil and natural gas industry. The Company operates through two segments: Contract Drilling Services, and Completion and Production Services. The Contract Drilling Services segment operates its rigs in Canada, the United States and internationally. The Completion and Production Services segment provides completion and workover services and ancillary services to oil and natural gas exploration and production companies in Canada and the United States. As of December 31, 2016, the Contract Drilling Services segment consisted of 255 land drilling rigs, including 135 in Canada, 103 in the United States, five in Mexico, four in Saudi Arabia, five in Kuwait, two in the Kurdistan region of Iraq and one in the country of Georgia.
Seadrill Company Profile
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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