Analyzing Transocean (RIG) & Nabors Industries (NBR)
Transocean (NYSE: RIG) and Nabors Industries (NYSE:NBR) are both oils/energy companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, earnings, institutional ownership, dividends, profitability, risk and valuation.
Valuation & Earnings
This table compares Transocean and Nabors Industries’ revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Transocean||$3.42 billion||0.87||$1.83 billion||($2.87)||-2.64|
|Nabors Industries||$2.25 billion||0.80||$535.84 million||($2.55)||-2.46|
Transocean has higher revenue and earnings than Nabors Industries. Transocean is trading at a lower price-to-earnings ratio than Nabors Industries, indicating that it is currently the more affordable of the two stocks.
Volatility & Risk
Transocean has a beta of 1.68, suggesting that its stock price is 68% more volatile than the S&P 500. Comparatively, Nabors Industries has a beta of 1.55, suggesting that its stock price is 55% more volatile than the S&P 500.
Nabors Industries pays an annual dividend of $0.24 per share and has a dividend yield of 3.8%. Transocean does not pay a dividend. Nabors Industries pays out -9.4% of its earnings in the form of a dividend. Transocean has raised its dividend for 4 consecutive years and Nabors Industries has raised its dividend for 3 consecutive years.
This table compares Transocean and Nabors Industries’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a summary of current recommendations for Transocean and Nabors Industries, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Transocean presently has a consensus target price of $12.51, indicating a potential upside of 65.09%. Nabors Industries has a consensus target price of $13.95, indicating a potential upside of 122.53%. Given Nabors Industries’ stronger consensus rating and higher possible upside, analysts clearly believe Nabors Industries is more favorable than Transocean.
Insider and Institutional Ownership
69.3% of Transocean shares are owned by institutional investors. Comparatively, 98.7% of Nabors Industries shares are owned by institutional investors. 0.3% of Transocean shares are owned by company insiders. Comparatively, 4.1% of Nabors Industries shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Nabors Industries beats Transocean on 9 of the 16 factors compared between the two stocks.
Transocean Company Profile
Transocean Ltd. is an international provider of offshore contract drilling services for oil and gas wells. The Company’s primary business is to contract its drilling rigs, related equipment and work crews on a dayrate basis to drill oil and gas wells. As of February 9, 2017, it owned or had partial ownership interests in and operated 56 mobile offshore drilling units. As of February 9, 2017, its fleet consisted of 30 floaters, seven harsh environment floaters, three deepwater floaters, six midwater floaters and 10 high-specification jackups. As February 9, 2017, it also had four ultra-deepwater drillships and five high-specification jackups under construction or under contract to be constructed. Its contract drilling services operations are spread across oil and gas exploration and development areas throughout the world. The Company’s drilling fleet can be characterized as floaters, including drillships and semisubmersibles, and jackups.
Nabors Industries Company Profile
Nabors Industries Ltd. owns and operates a land-based drilling rig fleet. The Company is a provider of offshore platform drilling rigs in the United States and multiple international markets. The Company conducts its Drilling & Rig Services business through four segments: U.S. Drilling, Canada Drilling, International Drilling and Rig Services. The Company provides wellbore placement services, drilling software and performance tools, drilling equipment and various technologies throughout the oil and gas markets. The Company’s Drilling & Rig Services business comprises land-based and offshore drilling rig operations and other rig services, consisting of equipment manufacturing, rig instrumentation and optimization software. The Company is a provider of directional drilling and measurement while drilling (MWD) systems and services. The Company also provides drilling technology and equipment, and well-site services.
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