Financial Analysis: Patterson-UTI Energy (PTEN) and Transocean (RIG)
Patterson-UTI Energy (NASDAQ: PTEN) and Transocean (NYSE:RIG) are both mid-cap oils/energy companies, but which is the better business? We will compare the two companies based on the strength of their profitability, institutional ownership, valuation, risk, analyst recommendations, earnings and dividends.
Patterson-UTI Energy pays an annual dividend of $0.08 per share and has a dividend yield of 0.4%. Transocean 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 4 consecutive years.
Insider & Institutional Ownership
98.6% of Patterson-UTI Energy shares are owned by institutional investors. Comparatively, 67.8% of Transocean shares are owned by institutional investors. 4.6% of Patterson-UTI Energy shares are owned by insiders. Comparatively, 0.3% of Transocean shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Volatility & Risk
Patterson-UTI Energy has a beta of 0.98, meaning that its share price is 2% less volatile than the S&P 500. Comparatively, Transocean has a beta of 1.67, meaning that its share price is 67% more volatile than the S&P 500.
This is a breakdown of recent recommendations for Patterson-UTI Energy and Transocean, as reported 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, suggesting a potential upside of 47.64%. Transocean has a consensus target price of $12.23, suggesting a potential upside of 32.40%. Given Patterson-UTI Energy’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Patterson-UTI Energy is more favorable than Transocean.
This table compares Patterson-UTI Energy and Transocean’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Valuation & Earnings
This table compares Patterson-UTI Energy and Transocean’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Patterson-UTI Energy||$1.34 billion||2.95||$260.21 million||($1.97)||-9.47|
|Transocean||$3.42 billion||1.06||$1.83 billion||($2.87)||-3.22|
Transocean has higher revenue and earnings than Patterson-UTI Energy. Patterson-UTI Energy is trading at a lower price-to-earnings ratio than Transocean, indicating that it is currently the more affordable of the two stocks.
Patterson-UTI Energy beats Transocean on 11 of the 16 factors compared between the two stocks.
Patterson-UTI Energy Company Profile
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.
Transocean Company Profile
Transocean Ltd. is an international provider of offshore contract drilling services for oil and gas wells. The Company’s primary business is to contract its drilling rigs, related equipment and work crews on a dayrate basis to drill oil and gas wells. As of February 9, 2017, it owned or had partial ownership interests in and operated 56 mobile offshore drilling units. As of February 9, 2017, its fleet consisted of 30 floaters, seven harsh environment floaters, three deepwater floaters, and six midwater floaters. Its contract drilling services operations are spread across oil and gas exploration and development areas throughout the world.
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