North Atlantic Drilling (NYSE: NADL) and SandRidge Energy (NYSE:SD) are both small-cap oils/energy companies, but which is the superior stock? We will compare the two businesses based on the strength of their risk, institutional ownership, earnings, dividends, analyst recommendations, valuation and profitability.

Insider and Institutional Ownership

5.7% of North Atlantic Drilling shares are held by institutional investors. Comparatively, 17.7% of SandRidge Energy shares are held by institutional investors. 3.6% of SandRidge Energy 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 & Valuation

This table compares North Atlantic Drilling and SandRidge Energy’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
North Atlantic Drilling $343.90 million 0.10 $157.90 million ($7.96) -0.18
SandRidge Energy $374.96 million 1.55 $226.66 million N/A N/A

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

Analyst Ratings

This is a summary of current ratings and price targets for North Atlantic Drilling and SandRidge Energy, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
North Atlantic Drilling 1 0 0 0 1.00
SandRidge Energy 0 1 1 0 2.50

North Atlantic Drilling presently has a consensus price target of $2.00, indicating a potential upside of 42.86%. SandRidge Energy has a consensus price target of $21.00, indicating a potential upside of 23.82%. Given North Atlantic Drilling’s higher probable upside, analysts plainly believe North Atlantic Drilling is more favorable than SandRidge Energy.

Profitability

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

Net Margins Return on Equity Return on Assets
North Atlantic Drilling -54.37% -52.01% -6.57%
SandRidge Energy N/A N/A N/A

Summary

SandRidge Energy beats North Atlantic Drilling on 10 of the 11 factors compared between the two stocks.

About North Atlantic Drilling

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.

About SandRidge Energy

SandRidge Energy, Inc. is an oil and natural gas company. The Company is engaged in the exploration, development and production of crude oil, natural gas and natural gas liquids. It operates through two segments: exploration and production, which is engaged in the exploration and production of oil and natural gas properties and includes its proportionate share of the activities of the SandRidge Mississippian Trust I, SandRidge Mississippian Trust II and SandRidge Permian Trust (the Royalty Trusts), and midstream services, which coordinates the delivery of electricity to its exploration and production operations in the Mid-Continent. It focuses on exploration and production activities in the Mid-Continent and Rockies regions of the United States. It owns and operates additional interests in west Texas. It also operates businesses and infrastructure systems, including a saltwater gathering and disposal system, and an electrical transmission system.

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