Head-To-Head Comparison: Diamond Offshore Drilling (DO) and Patterson-UTI Energy (PTEN)
Patterson-UTI Energy (NASDAQ: PTEN) and Diamond Offshore Drilling (NYSE:DO) are both oils/energy companies, but which is the superior stock? We will contrast the two companies based on the strength of their risk, profitabiliy, earnings, dividends, valuation, analyst recommendations and institutional ownership.
Volatility & Risk
Patterson-UTI Energy has a beta of 0.95, meaning that its stock price is 5% less volatile than the S&P 500. Comparatively, Diamond Offshore Drilling has a beta of 1.1, meaning that its stock price is 10% more volatile than the S&P 500.
This table compares Patterson-UTI Energy and Diamond Offshore Drilling’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Diamond Offshore Drilling||-29.01%||4.76%||2.75%|
This is a breakdown of recent recommendations and price targets for Patterson-UTI Energy and Diamond Offshore Drilling, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Diamond Offshore Drilling||7||11||3||0||1.81|
Patterson-UTI Energy presently has a consensus target price of $27.69, indicating a potential upside of 38.37%. Diamond Offshore Drilling has a consensus target price of $15.94, indicating a potential upside of 48.98%. Given Diamond Offshore Drilling’s higher possible upside, analysts clearly believe Diamond Offshore Drilling is more favorable than Patterson-UTI Energy.
Patterson-UTI Energy pays an annual dividend of $0.08 per share and has a dividend yield of 0.4%. Diamond Offshore Drilling does not pay a dividend. Patterson-UTI Energy pays out -3.8% of its earnings in the form of a dividend.
Earnings & Valuation
This table compares Patterson-UTI Energy and Diamond Offshore Drilling’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Patterson-UTI Energy||$952.10 million||3.47||$173.55 million||($2.09)||-9.57|
|Diamond Offshore Drilling||$1.45 billion||1.01||$634.05 million||($3.18)||-3.36|
Diamond Offshore Drilling has higher revenue and earnings than Patterson-UTI Energy. Patterson-UTI Energy is trading at a lower price-to-earnings ratio than Diamond Offshore Drilling, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
84.9% of Patterson-UTI Energy shares are held by institutional investors. 4.6% of Patterson-UTI Energy shares are held by insiders. Comparatively, 0.0% of Diamond Offshore Drilling shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Patterson-UTI Energy beats Diamond Offshore Drilling on 8 of the 15 factors compared between the two stocks.
About Patterson-UTI Energy
Patterson-UTI Energy, Inc. is an oilfield services company. The Company owns and operates a fleet of land-based drilling rigs and a fleet of pressure pumping equipment in the United States. The Company’s segments include Contract Drilling, Pressure Pumping and Other operations. The Contract Drilling segment markets its contract drilling services to independent and other oil and natural gas operators. As of December 31, 2016, the Company had 202 marketed land-based drilling rigs. The Pressure Pumping segment provides pressure pumping services to oil and natural gas operators primarily in Texas (Southwest Region) and the Appalachian region (Northeast Region). The Other operations segment includes the Company’s pipe handling components and related technology business, the oil and natural gas working interests and the Middle East/North Africa business. In addition, the Company owns and invests in oil and natural gas assets as a non-operating working interest owner in Texas and New Mexico.
About Diamond Offshore Drilling
Diamond Offshore Drilling, Inc. provides contract drilling services to the energy industry. As of December 31, 2016, the Company had a fleet of 24 offshore drilling rigs. As of December 31, 2016, its fleet consisted of four drillships, 19 semisubmersible rigs and one jack-up rig. Its fleet enables it to offer a range of services, primarily in the floater market, including ultra-deepwater, deepwater and mid-water. The principal markets for its offshore contract drilling services are the Gulf of Mexico, including the United States and Mexico; South America, principally offshore Brazil, and Trinidad and Tobago; Australia and Southeast Asia, including Malaysia, Indonesia and Vietnam; Europe, principally offshore the United Kingdom and Norway; East and West Africa; the Mediterranean, and the Middle East. The Company provides offshore drilling services to a customer base that includes independent oil and gas companies, and government-owned oil companies.
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