North Atlantic Drilling (NYSE: NADL) and Halcon Resources Corporation (NYSE:HK) are both small-cap oils/energy companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, valuation, dividends, profitability, analyst recommendations, institutional ownership and risk.

Risk and Volatility

North Atlantic Drilling has a beta of 3, meaning that its share price is 200% more volatile than the S&P 500. Comparatively, Halcon Resources Corporation has a beta of 3.95, meaning that its share price is 295% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings for North Atlantic Drilling and Halcon Resources Corporation, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
North Atlantic Drilling 1 0 0 0 1.00
Halcon Resources Corporation 0 3 6 0 2.67

North Atlantic Drilling presently has a consensus price target of $2.00, suggesting a potential upside of 78.57%. Halcon Resources Corporation has a consensus price target of $9.43, suggesting a potential upside of 47.44%. Given North Atlantic Drilling’s higher probable upside, equities analysts clearly believe North Atlantic Drilling is more favorable than Halcon Resources Corporation.

Valuation and Earnings

This table compares North Atlantic Drilling and Halcon Resources Corporation’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
North Atlantic Drilling $343.90 million 0.08 $157.90 million ($7.96) -0.14
Halcon Resources Corporation $488.44 million 1.96 $223.78 million ($3.77) -1.70

Halcon Resources Corporation has higher revenue and earnings than North Atlantic Drilling. Halcon Resources Corporation is trading at a lower price-to-earnings ratio than North Atlantic Drilling, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

5.7% of North Atlantic Drilling shares are owned by institutional investors. Comparatively, 91.6% of Halcon Resources Corporation shares are owned by institutional investors. 53.9% of Halcon Resources Corporation shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares North Atlantic Drilling and Halcon Resources Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
North Atlantic Drilling -54.37% -55.80% -6.69%
Halcon Resources Corporation -65.92% 16.78% 4.27%

Summary

Halcon Resources Corporation beats North Atlantic Drilling on 11 of the 13 factors compared between the two stocks.

North Atlantic Drilling Company Profile

North Atlantic Drilling Ltd. operates as an offshore drilling contractor in the North Atlantic region. The company provides harsh environment offshore drilling services to the oil and gas industry primarily in Norway, the United Kingdom, and the Russian Federation. As of December 31, 2016, it owned seven offshore drilling rigs, including three semi-submersibles, one ultra-deep water drillship, and three jack-up rigs. The company was founded in 2011 and is headquartered in Hamilton, Bermuda. North Atlantic Drilling Ltd. is a subsidiary of Seadrill Limited.

Halcon Resources Corporation Company Profile

Halcon Resources Corporation is an independent energy company focused on the acquisition, production, exploration and development of onshore liquids-rich oil and natural gas assets in the United States. The Company’s estimated total proved oil and natural gas reserves are approximately 146.8 million barrels of oil equivalent (MMBoe), consisting of over 120.7 million barrels of oil (MMBbls), approximately 13.0 MMBbls of natural gas liquids and over 78.4 billion cubic feet (Bcf) of natural gas. The Company’s oil and natural gas assets consist of undeveloped acreage positions in unconventional liquids-rich basins/fields. The Company has reserves in its core resource plays of approximately 143.6 MMBoe, of which over 92% are oil and natural gas liquids, and approximately 55% are proved developed. The Company has working interests in approximately 123,000 net acres prospective in the Bakken/Three Forks formations in North Dakota.

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