Critical Analysis: Noble (NYSE:NE) versus Nabors Industries (NYSE:NBR)

Nabors Industries (NYSE:NBR) and Noble (NYSE:NE) are both energy companies, but which is the better investment? We will contrast the two companies based on the strength of their valuation, analyst recommendations, institutional ownership, risk, dividends, earnings and profitability.

Earnings and Valuation

This table compares Nabors Industries and Noble”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Nabors Industries	$3.21 billion	0.41	$286.62 million	$16.49	5.42
Noble	$3.29 billion	2.42	$216.72 million	$1.35	36.88

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

Insider and Institutional Ownership

81.9% of Nabors Industries shares are owned by institutional investors. Comparatively, 68.1% of Noble shares are owned by institutional investors. 5.4% of Nabors Industries shares are owned by insiders. Comparatively, 1.5% of Noble shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Nabors Industries and Noble’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Nabors Industries	8.92%	-17.63%	-2.85%
Noble	6.60%	2.34%	1.40%

Analyst Recommendations

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Nabors Industries	2	4	2	0	2.00
Noble	1	10	1	0	2.00

Nabors Industries presently has a consensus target price of $69.00, indicating a potential downside of 22.80%. Noble has a consensus target price of $38.63, indicating a potential downside of 22.41%. Given Noble’s higher probable upside, analysts plainly believe Noble is more favorable than Nabors Industries.

Volatility & Risk

Nabors Industries has a beta of 0.89, indicating that its stock price is 11% less volatile than the S&P 500. Comparatively, Noble has a beta of 1.07, indicating that its stock price is 7% more volatile than the S&P 500.

Summary

Noble beats Nabors Industries on 7 of the 13 factors compared between the two stocks.

About Nabors Industries

Nabors Industries Ltd. provides drilling and drilling-related services for land-based and offshore oil and natural gas wells in the United States and internationally. The company operates through four segments: U.S. Drilling, International Drilling, Drilling Solutions, and Rig Technologies. It provides tubular running services, including casing and tubing running, and torque monitoring; managed pressure drilling services; and drilling-bit steering systems and rig instrumentation software. The company also offers drilling systems comprising ROCKit, a directional steering control system; SmartNAV, a collaborative guidance and advisory platform; SmartSLIDE, a directional steering control system; and RigCLOUD, a digital infrastructure to integrate applications to deliver real-time insight into operations across the rig fleet. In addition, it operates a fleet of land-based drilling rigs and marketed platforms rigs; manufactures and sells top drives, catwalks, wrenches, drawworks, and other drilling related equipment, such as robotic systems and downhole tools; and provides aftermarket sales and services for the installed base of its equipment. Nabors Industries Ltd. was founded in 1952 and is based in Hamilton, Bermuda.

About Noble

Noble Corp. Plc engages in the provision offshore drilling services for oil and gas industry. It focuses on a balanced fleet of floating and jackup rigs and the deployment of drilling rigs in oil and gas basins around the world. The company was founded by Lloyd Noble and Art Olson in 1921 and is headquartered in London, the United Kingdom.