Financial Analysis: Diamond Offshore Drilling (DO) vs. Ensco Plc (ESV)
Diamond Offshore Drilling (NYSE: DO) and Ensco Plc (NYSE:ESV) are both small-cap oils/energy companies, but which is the superior business? We will compare the two companies based on the strength of their institutional ownership, earnings, profitabiliy, analyst recommendations, dividends, valuation and risk.
This table compares Diamond Offshore Drilling and Ensco Plc’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 summary of recent ratings for Diamond Offshore Drilling and Ensco Plc, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Diamond Offshore Drilling||7||11||3||0||1.81|
Diamond Offshore Drilling presently has a consensus target price of $15.82, indicating a potential upside of 30.66%. Ensco Plc has a consensus target price of $9.63, indicating a potential upside of 72.18%. Given Ensco Plc’s stronger consensus rating and higher possible upside, analysts plainly believe Ensco Plc is more favorable than Diamond Offshore Drilling.
Ensco Plc pays an annual dividend of $0.04 per share and has a dividend yield of 0.7%. Diamond Offshore Drilling does not pay a dividend. Ensco Plc pays out 1.7% of its earnings in the form of a dividend.
Volatility and Risk
Diamond Offshore Drilling has a beta of 1.1, meaning that its share price is 10% more volatile than the S&P 500. Comparatively, Ensco Plc has a beta of 1.64, meaning that its share price is 64% more volatile than the S&P 500.
Valuation and Earnings
This table compares Diamond Offshore Drilling and Ensco Plc’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Diamond Offshore Drilling||$1.45 billion||1.15||$634.05 million||($3.18)||-3.81|
|Ensco Plc||$2.43 billion||0.70||$1.10 billion||$2.36||2.37|
Ensco Plc has higher revenue and earnings than Diamond Offshore Drilling. Diamond Offshore Drilling is trading at a lower price-to-earnings ratio than Ensco Plc, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
90.8% of Ensco Plc shares are owned by institutional investors. 0.0% of Diamond Offshore Drilling shares are owned by company insiders. Comparatively, 0.6% of Ensco Plc shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
Ensco Plc beats Diamond Offshore Drilling on 11 of the 15 factors compared between the two stocks.
Diamond Offshore Drilling Company Profile
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.
Ensco Plc Company Profile
Ensco plc is an offshore contract drilling company. The Company provides offshore contract drilling services to the international oil and gas industry. Its segments include Floaters, Jackups and Other. The Floaters segment includes its drillships and semisubmersible rigs, and provides contract drilling. Other consists of management services on rigs owned by third parties. The Floaters and the Jackups segments provide contract drilling. It owned and operated an offshore drilling rig fleet of 57 rigs, including two rigs under construction, with drilling operations around the world, as of December 31, 2016. As of December 31, 2016, its rig fleet included eight drill ships, 10 dynamically positioned semisubmersible rigs, three moored semisubmersible rigs and 38 jackup rigs. As of December 31, 2016, of its 59 rigs, 25 were located in the Middle East, Africa and Asia Pacific, 16 were located in North and South America (including Brazil) and 18 were located in Europe and the Mediterranean.
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