Pacific Drilling (OTCMKTS: PACDQ) and Parker Drilling (NYSE:PKD) are both small-cap oils/energy companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, earnings, institutional ownership, profitability, valuation, dividends and risk.
Risk and Volatility
Pacific Drilling has a beta of 3.32, suggesting that its share price is 232% more volatile than the S&P 500. Comparatively, Parker Drilling has a beta of 1.54, suggesting that its share price is 54% more volatile than the S&P 500.
This table compares Pacific Drilling and Parker Drilling’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Institutional and Insider Ownership
62.8% of Parker Drilling shares are owned by institutional investors. 3.6% of Parker Drilling shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.
Earnings & Valuation
This table compares Pacific Drilling and Parker Drilling’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|Pacific Drilling||$769.47 million||0.02||-$37.15 million||($20.58)||-0.04|
|Parker Drilling||$427.00 million||0.35||-$230.81 million||($1.08)||-0.99|
Pacific Drilling has higher revenue and earnings than Parker Drilling. Parker Drilling is trading at a lower price-to-earnings ratio than Pacific Drilling, indicating that it is currently the more affordable of the two stocks.
This is a summary of current ratings and target prices for Pacific Drilling and Parker Drilling, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Parker Drilling beats Pacific Drilling on 6 of the 11 factors compared between the two stocks.
About Pacific Drilling
Pacific Drilling S.A. is an international offshore drilling contractor. The Company provides offshore drilling services to the oil and natural gas industry through the use of high-specification rigs. The Company’s primary business is to contract its high-specification rigs, related equipment and work crews, primarily on a day rate basis, to drill wells for its clients. The Company is engaged in drillships segment. The Company focuses on the high-specification segment of the floating rig market. The Company considers high-specification requirements to include rigs in water depths of approximately 7,500 feet or projects requiring advanced operating capabilities, such as hook-loads (>800 tons), accommodations (over 200 beds), mud storage and pumping capacity, and deck-load and space capabilities. The Company’s contract drillships operate in the deepwater regions of the United States, Gulf of Mexico and Nigeria.
About Parker Drilling
Parker Drilling Company (Parker Drilling) is a provider of contract drilling, and drilling-related services and rental tools and services. The Company’s business consists of two business lines: drilling services and rental tools services. Its Rental Tools Services business includes U.S. Rental Tools and International Rental Tools segments, and its Drilling Services business includes its U.S. (Lower 48) Drilling, and International & Alaska Drilling segments. In its Drilling Services business, the Company drills oil and gas wells for customers in both the United States and international markets. In its Rental Tools Services business, the Company provides rental equipment and services to exploration and production (E&P) companies, drilling contractors and service companies on land and offshore in the United States and select international markets. As of December 31, 2016, the Company had operations in 20 countries.
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