Head-To-Head Review: Precision Drilling Corporation (PDS) and Pacific Drilling (PACD)
Precision Drilling Corporation (NYSE: PDS) and Pacific Drilling (NYSE:PACD) are both small-cap oils/energy companies, but which is the better stock? We will compare the two companies based on the strength of their earnings, risk, analyst recommendations, profitability, institutional ownership, dividends and valuation.
Institutional and Insider Ownership
63.2% of Precision Drilling Corporation shares are held by institutional investors. Comparatively, 6.3% of Pacific Drilling shares are held by institutional investors. 1.0% of Precision Drilling Corporation shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.
Earnings and Valuation
This table compares Precision Drilling Corporation and Pacific Drilling’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Precision Drilling Corporation||$871.79 million||0.86||$194.27 million||($0.35)||-7.34|
|Pacific Drilling||$532.97 million||0.02||$195.79 million||($13.19)||-0.04|
Pacific Drilling has higher revenue, but lower earnings than Precision Drilling Corporation. Precision Drilling Corporation is trading at a lower price-to-earnings ratio than Pacific Drilling, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
Precision Drilling Corporation has a beta of 1.73, meaning that its share price is 73% more volatile than the S&P 500. Comparatively, Pacific Drilling has a beta of 2.53, meaning that its share price is 153% more volatile than the S&P 500.
This table compares Precision Drilling Corporation and Pacific Drilling’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Precision Drilling Corporation||-12.38%||-7.10%||-3.22%|
This is a breakdown of recent ratings and price targets for Precision Drilling Corporation and Pacific Drilling, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Precision Drilling Corporation||0||6||9||1||2.69|
Precision Drilling Corporation presently has a consensus target price of $6.28, indicating a potential upside of 144.36%. Given Precision Drilling Corporation’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Precision Drilling Corporation is more favorable than Pacific Drilling.
Precision Drilling Corporation beats Pacific Drilling on 12 of the 14 factors compared between the two stocks.
About Precision Drilling Corporation
Precision Drilling Corporation (Precision) is an oilfield services company. The Company provides onshore drilling and completion and production services to exploration and production companies in the oil and natural gas industry. The Company operates through two segments: Contract Drilling Services, and Completion and Production Services. The Contract Drilling Services segment operates its rigs in Canada, the United States and internationally. The Completion and Production Services segment provides completion and workover services and ancillary services to oil and natural gas exploration and production companies in Canada and the United States. As of December 31, 2016, the Contract Drilling Services segment consisted of 255 land drilling rigs, including 135 in Canada, 103 in the United States, five in Mexico, four in Saudi Arabia, five in Kuwait, two in the Kurdistan region of Iraq and one in the country of Georgia.
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.
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