Head to Head Analysis: Ring Energy (REI) and Independence Contract Drilling (ICD)
Ring Energy (NYSE: REI) and Independence Contract Drilling (NYSE:ICD) are both small-cap basic materials companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, risk, earnings, profitability, institutional ownership, valuation and analyst recommendations.
Institutional and Insider Ownership
80.8% of Independence Contract Drilling shares are held by institutional investors. 11.8% of Independence Contract Drilling shares are held 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.
This table compares Ring Energy and Independence Contract Drilling’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Independence Contract Drilling||-40.75%||-8.62%||-7.24%|
Valuation and Earnings
This table compares Ring Energy and Independence Contract Drilling’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Ring Energy||$42.26 million||15.78||$21.77 million||N/A||N/A|
|Independence Contract Drilling||$73.97 million||1.61||$6.78 million||($0.81)||-3.89|
Ring Energy has higher revenue, but lower earnings than Independence Contract Drilling.
This is a summary of current recommendations and price targets for Ring Energy and Independence Contract Drilling, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Independence Contract Drilling||0||1||6||0||2.86|
Ring Energy currently has a consensus price target of $18.60, indicating a potential upside of 50.97%. Independence Contract Drilling has a consensus price target of $6.50, indicating a potential upside of 106.35%. Given Independence Contract Drilling’s higher probable upside, analysts plainly believe Independence Contract Drilling is more favorable than Ring Energy.
Ring Energy beats Independence Contract Drilling on 6 of the 10 factors compared between the two stocks.
Ring Energy Company Profile
Ring Energy, Inc. acquires, explores for, develops, and produces oil and natural gas in Texas and Kansas, the United States. As of December 31, 2016, its proved reserves consisted of approximately 27.7 million barrel of oil equivalent. The company also owns interests in 32,663 net developed and undeveloped acres in Andrews and Gaines counties, and 20,490 net developed and undeveloped acres in Reeves and Culberson counties, Texas; and 14,549 net developed and undeveloped acres in Kansas. It primarily sells its oil and natural gas production to end users, marketers, and other purchasers. The company was formerly known as Transglobal Mining Corp. and changed its name to Ring Energy, Inc. in March 2008. Ring Energy, Inc. was founded in 2004 and is headquartered in Midland, Texas.
Independence Contract Drilling Company Profile
Independence Contract Drilling, Inc. provides land-based contract drilling services for oil and natural gas producers in the United States. The company constructs, owns, and operates a fleet of ShaleDriller rigs to optimize the development of various oil and gas properties in the Permian Basin. As of December 31, 2016, it had 12 rigs. The company was founded in 2011 and is headquartered in Houston, Texas.
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