Atwood Oceanics (NYSE: ATW) and Diamond Offshore Drilling (NYSE:DO) are both small-cap oils/energy companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, risk, dividends, profitability, analyst recommendations, institutional ownership and valuation.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Atwood Oceanics and Diamond Offshore Drilling, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Atwood Oceanics 3 14 4 0 2.05
Diamond Offshore Drilling 7 11 4 0 1.86

Atwood Oceanics currently has a consensus price target of $11.70, suggesting a potential upside of 45.92%. Diamond Offshore Drilling has a consensus price target of $14.81, suggesting a potential upside of 11.82%. Given Atwood Oceanics’ stronger consensus rating and higher possible upside, equities analysts plainly believe Atwood Oceanics is more favorable than Diamond Offshore Drilling.

Earnings and Valuation

This table compares Atwood Oceanics and Diamond Offshore Drilling’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Atwood Oceanics $605.28 million 1.07 $296.89 million ($0.20) -40.10
Diamond Offshore Drilling $1.48 billion 1.23 $660.47 million $1.24 10.68

Diamond Offshore Drilling has higher revenue and earnings than Atwood Oceanics. Atwood Oceanics is trading at a lower price-to-earnings ratio than Diamond Offshore Drilling, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

92.0% of Atwood Oceanics shares are held by institutional investors. 1.2% of Atwood Oceanics shares are held by insiders. Comparatively, 0.0% of Diamond Offshore 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.

Profitability

This table compares Atwood Oceanics and Diamond Offshore Drilling’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Atwood Oceanics -3.06% 2.25% 1.59%
Diamond Offshore Drilling 11.19% 5.77% 3.42%

Volatility & Risk

Atwood Oceanics has a beta of 2.37, suggesting that its share price is 137% more volatile than the S&P 500. Comparatively, Diamond Offshore Drilling has a beta of 1.13, suggesting that its share price is 13% more volatile than the S&P 500.

Summary

Diamond Offshore Drilling beats Atwood Oceanics on 8 of the 13 factors compared between the two stocks.

About Atwood Oceanics

Atwood Oceanics, Inc. is an offshore drilling company engaged in the drilling and completion of exploration and development wells for the global oil and gas industry. The Company owns various types of drilling rigs, such as Ultra-Deepwater Rigs, Deepwater Semisubmersibles and Jackups. Its Ultra-deepwater Rigs and Deepwater Semisubmersibles include Atwood Achiever, Atwood Archer, Atwood Admiral, Atwood Advantage, Atwood Condor, Atwood Eagle and Atwood Osprey. Its Jackup Rigs included Atwood Mako, Atwood Manta, Atwood Aurora, Atwood Beacon and Atwood Orca. The Atwood Mako and Atwood Manta, both approximately 400-foot water depth Pacific Class jackup rigs, are operating offshore Vietnam and offshore Thailand. The Atwood Aurora, an approximately 350-foot water depth jackup, is operating offshore West Africa. The Atwood Beacon, an approximately 400-foot water depth jackup, is operating in the Mediterranean Sea.

About Diamond Offshore Drilling

Diamond Offshore Drilling, Inc. provides contract drilling services to the energy industry. As of December 31, 2016, the Company had a fleet of 24 offshore drilling rigs. As of December 31, 2016, its fleet consisted of four drillships, 19 semisubmersible rigs and one jack-up rig. Its fleet enables it to offer a range of services, primarily in the floater market, including ultra-deepwater, deepwater and mid-water. The principal markets for its offshore contract drilling services are the Gulf of Mexico, including the United States and Mexico; South America, principally offshore Brazil, and Trinidad and Tobago; Australia and Southeast Asia, including Malaysia, Indonesia and Vietnam; Europe, principally offshore the United Kingdom and Norway; East and West Africa; the Mediterranean, and the Middle East. The Company provides offshore drilling services to a customer base that includes independent oil and gas companies, and government-owned oil companies.

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