Financial Analysis: Seadrill (NYSE:SDRL) & Pacific Drilling (NYSE:PACD)

Seadrill (NYSE:SDRL) and Pacific Drilling (NYSE:PACD) are both small-cap oils/energy companies, but which is the superior stock? We will contrast the two businesses based on the strength of their dividends, analyst recommendations, profitability, risk, earnings, valuation and institutional ownership.

Volatility & Risk

Seadrill has a beta of 2.25, suggesting that its stock price is 125% more volatile than the S&P 500. Comparatively, Pacific Drilling has a beta of 2.2, suggesting that its stock price is 120% more volatile than the S&P 500.

Earnings & Valuation

This table compares Seadrill and Pacific Drilling’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Seadrill $1.25 billion 0.97 -$4.48 billion N/A N/A
Pacific Drilling $264.87 million 1.27 -$2.18 billion N/A N/A

Pacific Drilling has lower revenue, but higher earnings than Seadrill.

Insider and Institutional Ownership

9.5% of Seadrill shares are owned by institutional investors. Comparatively, 86.2% of Pacific Drilling shares are owned by institutional investors. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Seadrill and Pacific Drilling, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Seadrill 0 1 0 0 2.00
Pacific Drilling 0 0 1 0 3.00

Seadrill presently has a consensus price target of $304.00, indicating a potential upside of 12,566.67%. Given Seadrill’s higher probable upside, research analysts plainly believe Seadrill is more favorable than Pacific Drilling.

Profitability

This table compares Seadrill and Pacific Drilling’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Seadrill N/A N/A N/A
Pacific Drilling -827.68% -133.18% -60.70%

Summary

Seadrill beats Pacific Drilling on 6 of the 11 factors compared between the two stocks.

About Seadrill

Seadrill Ltd. is an offshore drilling contractor providing offshore drilling services to the oil and gas industry. Its primary business is the ownership and operation of drillships, semi-submersible rigs, jack-up rigs, tender rigs for operations in shallow, mid, deep, and ultra deep-water areas, and in benign and harsh environments. The company operates through the following segments: Floaters, Jack-up Rigs, and Other. The Floaters segment offer services encompassing drilling, completion, and maintenance of offshore exploration and production wells. The Jack-up Rigs segment offers drilling services, completion and maintenance of offshore exploration and production wells. The Other segment engages in management services to third parties and related parties. Seadrill was founded on May 10, 2005 and is headquartered in Hamilton, Bermuda.

About Pacific Drilling

Pacific Drilling S.A., together with its subsidiaries, operates as an offshore drilling contractor. It provides offshore drilling services to the oil and natural gas industry. The company contracts its fleet of rigs to drill wells for its customers. It has a fleet of seven drillships. The company was founded in 2006 and is headquartered in Houston, Texas.

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