Analyzing Seadrill Limited (SDRL) and Helmerich & Payne (HP)
Seadrill Limited (NYSE: SDRL) and Helmerich & Payne (NYSE:HP) are both oils/energy companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, analyst recommendations, valuation, earnings, institutional ownership, profitabiliy and dividends.
Valuation and Earnings
This table compares Seadrill Limited and Helmerich & Payne’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Seadrill Limited||$2.65 billion||0.06||$1.44 billion||($0.38)||-0.90|
|Helmerich & Payne||$1.60 billion||3.22||$371.18 million||($1.67)||-28.40|
Seadrill Limited has higher revenue and earnings than Helmerich & Payne. Helmerich & Payne is trading at a lower price-to-earnings ratio than Seadrill Limited, indicating that it is currently the more affordable of the two stocks.
Helmerich & Payne pays an annual dividend of $2.80 per share and has a dividend yield of 5.9%. Seadrill Limited does not pay a dividend. Helmerich & Payne pays out -167.7% of its earnings in the form of a dividend. Seadrill Limited has raised its dividend for 44 consecutive years and Helmerich & Payne has raised its dividend for 7 consecutive years.
This is a breakdown of recent ratings and target prices for Seadrill Limited and Helmerich & Payne, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Helmerich & Payne||6||9||6||0||2.00|
Helmerich & Payne has a consensus target price of $56.06, suggesting a potential upside of 18.19%. Given Helmerich & Payne’s stronger consensus rating and higher probable upside, analysts clearly believe Helmerich & Payne is more favorable than Seadrill Limited.
Risk & Volatility
Seadrill Limited has a beta of 2.66, meaning that its share price is 166% more volatile than the S&P 500. Comparatively, Helmerich & Payne has a beta of 1.16, meaning that its share price is 16% more volatile than the S&P 500.
This table compares Seadrill Limited and Helmerich & Payne’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Helmerich & Payne||-11.19%||-3.37%||-2.24%|
Insider & Institutional Ownership
28.6% of Seadrill Limited shares are held by institutional investors. 4.2% of Helmerich & Payne shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Seadrill Limited beats Helmerich & Payne on 9 of the 16 factors compared between the two stocks.
Seadrill Limited Company Profile
Seadrill Limited is an offshore drilling contractor providing offshore drilling services to the oil and gas industry. The Company’s primary business is the ownership and operation of drillships, semi-submersible rigs and jack-up rigs for operations in shallow-, mid-, deep-, and ultra deepwater areas, and in benign and harsh environments. The Company’s segments are Floaters and Jack-ups. The Company offers services encompassing drilling, completion and maintenance of offshore exploration and production wells. The Company contracts its drilling units primarily on a dayrate basis to drill wells for its customers. The Company has a fleet of approximately 38 offshore drilling units consisting of over 12 semi-submersible rigs, approximately seven drillships and over 19 jack-up rigs in operation, and contracts for the construction of approximately 13 offshore drilling units. The Company also provides management services to certain unconsolidated companies in which its holds investments.
Helmerich & Payne Company Profile
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.
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