Pacific Drilling (PACDQ) & Rowan Companies (RDC) Head-To-Head Survey

Pacific Drilling (OTCMKTS: PACDQ) and Rowan Companies (NYSE:RDC) are both oils/energy companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, analyst recommendations, risk, dividends, institutional ownership, earnings and profitability.

Earnings & Valuation

This table compares Pacific Drilling and Rowan Companies’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Pacific Drilling $769.47 million 0.03 -$37.15 million ($20.58) -0.05
Rowan Companies $1.84 billion 1.09 $320.60 million ($0.52) -30.62

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

Analyst Ratings

This is a summary of current ratings and price targets for Pacific Drilling and Rowan Companies, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Pacific Drilling 0 0 0 0 N/A
Rowan Companies 2 13 4 0 2.11

Rowan Companies has a consensus price target of $16.47, indicating a potential upside of 3.43%. Given Rowan Companies’ higher probable upside, analysts clearly believe Rowan Companies is more favorable than Pacific Drilling.

Volatility and Risk

Pacific Drilling has a beta of 3.22, suggesting that its stock price is 222% more volatile than the S&P 500. Comparatively, Rowan Companies has a beta of 1.9, suggesting that its stock price is 90% more volatile than the S&P 500.

Profitability

This table compares Pacific Drilling and Rowan Companies’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Pacific Drilling -101.35% -17.63% -7.68%
Rowan Companies -4.76% -0.61% -0.38%

Institutional and Insider Ownership

0.3% of Pacific Drilling shares are owned by institutional investors. 0.8% of Rowan Companies shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

Rowan Companies beats Pacific Drilling on 10 of the 13 factors compared between the two stocks.

About Pacific Drilling

Pacific Drilling S.A. is an international offshore drilling contractor. The Company provides offshore drilling services to the oil and natural gas industry through the use of high-specification rigs. The Company’s primary business is to contract its high-specification rigs, related equipment and work crews, primarily on a day rate basis, to drill wells for its clients. The Company is engaged in drillships segment. The Company focuses on the high-specification segment of the floating rig market. The Company considers high-specification requirements to include rigs in water depths of approximately 7,500 feet or projects requiring advanced operating capabilities, such as hook-loads (>800 tons), accommodations (over 200 beds), mud storage and pumping capacity, and deck-load and space capabilities. The Company’s contract drillships operate in the deepwater regions of the United States, Gulf of Mexico and Nigeria.

About Rowan Companies

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.

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