Rowan Companies PLC (NYSE: RDC) and Nabors Industries (NYSE:NBR) are both energy companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, analyst recommendations, earnings, institutional ownership, valuation, profitability and risk.

Risk & Volatility

Rowan Companies PLC has a beta of 1.8, suggesting that its stock price is 80% more volatile than the S&P 500. Comparatively, Nabors Industries has a beta of 1.57, suggesting that its stock price is 57% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Rowan Companies PLC and Nabors Industries, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Rowan Companies PLC 2 13 4 0 2.11
Nabors Industries 0 6 17 0 2.74

Rowan Companies PLC currently has a consensus target price of $16.50, indicating a potential upside of 44.61%. Nabors Industries has a consensus target price of $13.15, indicating a potential upside of 67.30%. Given Nabors Industries’ stronger consensus rating and higher probable upside, analysts clearly believe Nabors Industries is more favorable than Rowan Companies PLC.

Earnings and Valuation

This table compares Rowan Companies PLC and Nabors Industries’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Rowan Companies PLC $1.43 billion 1.01 $627.20 million ($0.31) -36.81
Nabors Industries $2.25 billion 1.00 $535.84 million ($2.55) -3.08

Rowan Companies PLC has higher revenue, but lower earnings than Nabors Industries. Rowan Companies PLC is trading at a lower price-to-earnings ratio than Nabors Industries, indicating that it is currently the more affordable of the two stocks.

Dividends

Nabors Industries pays an annual dividend of $0.24 per share and has a dividend yield of 3.1%. Rowan Companies PLC does not pay a dividend. Nabors Industries pays out -9.4% of its earnings in the form of a dividend. Rowan Companies PLC has increased its dividend for 2 consecutive years and Nabors Industries has increased its dividend for 3 consecutive years.

Insider and Institutional Ownership

95.7% of Nabors Industries shares are held by institutional investors. 0.8% of Rowan Companies PLC shares are held by company insiders. Comparatively, 4.1% of Nabors Industries shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Profitability

This table compares Rowan Companies PLC and Nabors Industries’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Rowan Companies PLC -8.96% -2.16% -1.35%
Nabors Industries -32.35% -13.31% -5.32%

Summary

Nabors Industries beats Rowan Companies PLC on 9 of the 16 factors compared between the two stocks.

About Rowan Companies PLC

Rowan Companies plc is a provider of offshore contract drilling services to the international oil and gas industry. The Company operates through two segments: deepwater and jack-ups. Its deepwater segment consists of drillship operations. As of December 31, 2016, the Company’s fleet consisted of 29 mobile offshore drilling units, including 25 self-elevating jack-up rigs and four ultra-deepwater drillships. The Company’s fleet operates across the world, including the United States Gulf of Mexico (US GOM), the United Kingdom and Norwegian sectors of the North Sea, the Middle East and Trinidad. As of February 14, 2017, the Company’s drilling fleet consisted of four ultra-deepwater drillships; 19 high-specification cantilever jack-up rigs, and six premium cantilever jack-up rigs. Its jack-ups are capable of drilling wells to maximum depths ranging from 25,000 to 40,000 feet and in maximum water depths ranging from 300 to 550 feet, depending on rig size, location and outfitting.

About Nabors Industries

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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