Analyzing SBM Offshore (OTCMKTS:SBFFY) and Transocean (NYSE:RIG)

Transocean (NYSE:RIG) and SBM Offshore (OTCMKTS:SBFFY) are both energy companies, but which is the superior business? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, institutional ownership, valuation, dividends, risk and profitability.

Analyst Recommendations

This is a breakdown of current recommendations for Transocean and SBM Offshore, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Transocean	3	4	3	1	2.18
SBM Offshore	0	1	0	0	2.00

Transocean currently has a consensus price target of $6.68, suggesting a potential upside of 15.85%. Given Transocean’s stronger consensus rating and higher probable upside, analysts clearly believe Transocean is more favorable than SBM Offshore.

Profitability

This table compares Transocean and SBM Offshore’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Transocean	-40.24%	2.60%	1.37%
SBM Offshore	N/A	N/A	N/A

Institutional and Insider Ownership

67.7% of Transocean shares are held by institutional investors. 9.7% of Transocean shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Transocean and SBM Offshore”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Transocean	$3.96 billion	1.62	-$2.92 billion	($1.88)	-3.07
SBM Offshore	N/A	N/A	N/A	$1.13	34.83

SBM Offshore has lower revenue, but higher earnings than Transocean. Transocean is trading at a lower price-to-earnings ratio than SBM Offshore, indicating that it is currently the more affordable of the two stocks.

Summary

Transocean beats SBM Offshore on 9 of the 12 factors compared between the two stocks.

About Transocean

Transocean Ltd., together with its subsidiaries, provides offshore contract drilling services for oil and gas wells worldwide. It contracts mobile offshore drilling rigs, related equipment, and work crews to drill oil and gas wells. The company operates a fleet of mobile offshore drilling units, consisting of ultra-deepwater floaters and harsh environment floaters. It serves integrated energy companies, government-owned or government-controlled energy companies, and other independent energy companies. The company was founded in 1926 and is based in Steinhausen, Switzerland.

About SBM Offshore

SBM Offshore N.V. provides floating production solutions to the offshore energy industry worldwide. It operates in two segments, Lease and Operate, and Turnkey. It engages in the design, supply, installation, operation, lease, and life extension of floating production storage and offloading (FPSO) vessels, as well as semi-submersibles, tension leg floaters, turret mooring systems, floating offshore wind, and brownfield and offshore loading terminals. The company also provides catenary anchor leg mooring (CALM) or single point mooring (SPM) terminals; and solutions for flexible flowline and subsea structure installation works. It operates a fleet of 15 FPSOs and 1 semi-submersible unit. The company was formerly known as IHC Caland and changed its name to SBM Offshore N.V. in 2005. SBM Offshore N.V. was founded in 1862 and is headquartered in Schiphol, the Netherlands.