Ring Energy (NYSE: REI) and North Atlantic Drilling (NYSE:NADL) are both small-cap basic materials companies, but which is the superior investment? We will contrast the two companies based on the strength of their earnings, risk, profitability, valuation, dividends, institutional ownership and analyst recommendations.

Insider & Institutional Ownership

5.7% of North Atlantic Drilling shares are held by institutional investors. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Valuation & Earnings

This table compares Ring Energy and North Atlantic 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 18.35 $21.77 million N/A N/A
North Atlantic Drilling $343.90 million 0.08 $157.90 million ($7.96) -0.14

North Atlantic Drilling has higher revenue and earnings than Ring Energy.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Ring Energy and North Atlantic Drilling, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ring Energy 0 0 6 0 3.00
North Atlantic Drilling 0 0 0 0 N/A

Ring Energy presently has a consensus price target of $18.60, indicating a potential upside of 29.89%. Given Ring Energy’s higher probable upside, equities research analysts plainly believe Ring Energy is more favorable than North Atlantic Drilling.

Profitability

This table compares Ring Energy and North Atlantic Drilling’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ring Energy N/A N/A N/A
North Atlantic Drilling -54.37% -55.80% -6.69%

Summary

Ring Energy beats North Atlantic Drilling on 6 of the 9 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.

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.

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