Precision Drilling Corporation (PDS) versus Patterson-UTI Energy (PTEN) Critical Review
Precision Drilling Corporation (NYSE: PDS) and Patterson-UTI Energy (NASDAQ:PTEN) are both oils/energy companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, dividends, profitabiliy, institutional ownership, risk and valuation.
Patterson-UTI Energy pays an annual dividend of $0.08 per share and has a dividend yield of 0.4%. Precision Drilling Corporation does not pay a dividend. Patterson-UTI Energy pays out -4.1% of its earnings in the form of a dividend.
Earnings & Valuation
This table compares Precision Drilling Corporation and Patterson-UTI Energy’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Precision Drilling Corporation||$790.22 million||1.13||$170.01 million||($0.35)||-8.69|
|Patterson-UTI Energy||$1.34 billion||2.35||$205.64 million||($1.97)||-9.69|
Patterson-UTI Energy has higher revenue and earnings than Precision Drilling Corporation. Patterson-UTI Energy is trading at a lower price-to-earnings ratio than Precision Drilling Corporation, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
Precision Drilling Corporation has a beta of 1.73, suggesting that its share price is 73% more volatile than the S&P 500. Comparatively, Patterson-UTI Energy has a beta of 0.94, suggesting that its share price is 6% less volatile than the S&P 500.
This is a breakdown of current ratings and recommmendations for Precision Drilling Corporation and Patterson-UTI Energy, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Precision Drilling Corporation||0||6||9||1||2.69|
Precision Drilling Corporation presently has a consensus target price of $6.28, indicating a potential upside of 106.58%. Patterson-UTI Energy has a consensus target price of $26.96, indicating a potential upside of 41.21%. Given Precision Drilling Corporation’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Precision Drilling Corporation is more favorable than Patterson-UTI Energy.
This table compares Precision Drilling Corporation and Patterson-UTI Energy’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Precision Drilling Corporation||-12.38%||-7.10%||-3.22%|
Insider and Institutional Ownership
63.2% of Precision Drilling Corporation shares are owned by institutional investors. Comparatively, 85.1% of Patterson-UTI Energy shares are owned by institutional investors. 1.0% of Precision Drilling Corporation shares are owned by insiders. Comparatively, 4.6% of Patterson-UTI Energy shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
About Precision Drilling Corporation
Precision Drilling Corporation (Precision) is an oilfield services company. The Company provides onshore drilling and completion and production services to exploration and production companies in the oil and natural gas industry. The Company operates through two segments: Contract Drilling Services, and Completion and Production Services. The Contract Drilling Services segment operates its rigs in Canada, the United States and internationally. The Completion and Production Services segment provides completion and workover services and ancillary services to oil and natural gas exploration and production companies in Canada and the United States. As of December 31, 2016, the Contract Drilling Services segment consisted of 255 land drilling rigs, including 135 in Canada, 103 in the United States, five in Mexico, four in Saudi Arabia, five in Kuwait, two in the Kurdistan region of Iraq and one in the country of Georgia.
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.
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