Head to Head Analysis: Independence Contract Drilling (ICD) versus Ring Energy (REI)

Independence Contract Drilling (NYSE: ICD) and Ring Energy (NYSE:REI) are both small-cap oils/energy companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, institutional ownership, valuation, analyst recommendations, dividends, earnings and risk.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Independence Contract Drilling and Ring Energy, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Independence Contract Drilling 0 1 5 0 2.83
Ring Energy 0 0 6 0 3.00

Independence Contract Drilling currently has a consensus price target of $6.38, indicating a potential upside of 89.17%. Ring Energy has a consensus price target of $18.60, indicating a potential upside of 42.86%. Given Independence Contract Drilling’s higher probable upside, equities analysts clearly believe Independence Contract Drilling is more favorable than Ring Energy.

Institutional & Insider Ownership

80.8% of Independence Contract Drilling shares are held by institutional investors. 11.8% of Independence Contract Drilling shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Independence Contract Drilling and Ring Energy’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Independence Contract Drilling -40.75% -8.62% -7.24%
Ring Energy N/A N/A N/A

Earnings & Valuation

This table compares Independence Contract Drilling and Ring Energy’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Independence Contract Drilling $73.97 million 1.72 $6.78 million ($0.81) -4.16
Ring Energy $42.26 million 16.68 $21.77 million N/A N/A

Ring Energy has higher revenue, but lower earnings than Independence Contract Drilling.

Summary

Ring Energy beats Independence Contract Drilling on 7 of the 11 factors compared between the two stocks.

About Independence Contract Drilling

Independence Contract Drilling, Inc. provides land-based contract drilling services for oil and natural gas producers in the United States. The company constructs, owns, and operates a fleet of ShaleDriller rigs to optimize the development of various oil and gas properties in the Permian Basin. As of December 31, 2016, it had 12 rigs. The company was founded in 2011 and is headquartered in Houston, Texas.

About Ring Energy

Ring Energy, Inc. acquires, explores for, develops, and produces oil and natural gas in Texas and Kansas, the United States. As of December 31, 2016, its proved reserves consisted of approximately 27.7 million barrel of oil equivalent. The company also owns interests in 32,663 net developed and undeveloped acres in Andrews and Gaines counties, and 20,490 net developed and undeveloped acres in Reeves and Culberson counties, Texas; and 14,549 net developed and undeveloped acres in Kansas. It primarily sells its oil and natural gas production to end users, marketers, and other purchasers. The company was formerly known as Transglobal Mining Corp. and changed its name to Ring Energy, Inc. in March 2008. Ring Energy, Inc. was founded in 2004 and is headquartered in Midland, Texas.

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