Helmerich & Payne (NYSE: HP) and Transocean Partners (NYSE:RIGP) are both oils/energy companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, earnings, dividends, profitability, valuation, risk and analyst recommendations.
This table compares Helmerich & Payne and Transocean Partners’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Helmerich & Payne||-7.16%||-2.96%||-1.95%|
This is a summary of recent ratings and price targets for Helmerich & Payne and Transocean Partners, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Helmerich & Payne||7||14||3||0||1.83|
Helmerich & Payne currently has a consensus target price of $54.33, indicating a potential downside of 8.84%. Transocean Partners has a consensus target price of $18.00, indicating a potential upside of 0.95%. Given Transocean Partners’ stronger consensus rating and higher probable upside, analysts clearly believe Transocean Partners is more favorable than Helmerich & Payne.
Helmerich & Payne pays an annual dividend of $2.80 per share and has a dividend yield of 4.7%. Transocean Partners pays an annual dividend of $1.45 per share and has a dividend yield of 8.1%. Helmerich & Payne pays out -233.3% of its earnings in the form of a dividend. Transocean Partners pays out 60.2% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Helmerich & Payne has increased its dividend for 44 consecutive years and Transocean Partners has increased its dividend for 2 consecutive years.
Insider & Institutional Ownership
29.0% of Transocean Partners shares are held by institutional investors. 4.2% of Helmerich & Payne shares are held by company insiders. Comparatively, 0.1% of Transocean Partners 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 & Valuation
This table compares Helmerich & Payne and Transocean Partners’ revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Helmerich & Payne||$1.80 billion||3.59||-$128.21 million||($1.20)||-49.67|
Transocean Partners has lower revenue, but higher earnings than Helmerich & Payne. Helmerich & Payne is trading at a lower price-to-earnings ratio than Transocean Partners, indicating that it is currently the more affordable of the two stocks.
Transocean Partners beats Helmerich & Payne on 8 of the 13 factors compared between the two stocks.
About Helmerich & Payne
Helmerich & Payne, Inc. is engaged in contract drilling of oil and gas wells for others. The Company operates in the contract drilling industry. The Company’s contract drilling business consists of three segments: U.S. Land, Offshore and International Land. The Company is also engaged in the ownership, development and operation of commercial real estate and the research and development of rotary steerable technology. Its real estate investments are located within Tulsa, Oklahoma, and include a shopping center containing approximately 441,000 leasable square feet, multi-tenant industrial warehouse properties containing approximately one million leasable square feet and approximately 210 acres of undeveloped real estate. The Company provides drilling rigs, equipment, personnel and camps on a contract basis. The Company’s subsidiaries include Helmerich & Payne International Drilling Co. and Helmerich & Payne de Venezuela, C.A.
About Transocean Partners
Transocean Partners LLC a limited liability company. The Company is formed by Transocean Partners Holdings Limited and a subsidiary of Transocean Ltd. (Transocean), to own, operate and acquire advanced offshore drilling rigs. The Company’s assets consist of over 50% ownership interest in each of the entities that owns and operates over three ultra-deepwater drilling rigs that are operating in the U.S. Gulf of Mexico, which include Discoverer Clear Leader, Discoverer Inspiration and Development Driller III. The Company owns or has partial ownership interests in, and operated over 60 mobile offshore drilling units, including approximately 30 ultra-deepwater floaters, over seven harsh environment floaters, approximately five deepwater floaters, over 10 midwater floaters and approximately 10 high-specification jackups. Transocean also has approximately six ultra-deepwater drillships and over five high-specification jackups under construction.
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