Parker Drilling (NYSE: PKD) and Atwood Oceanics (NYSE:ATW) are both small-cap oils/energy companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, earnings, dividends, profitability, risk, valuation and analyst recommendations.

Risk & Volatility

Parker Drilling has a beta of 1.5, suggesting that its share price is 50% more volatile than the S&P 500. Comparatively, Atwood Oceanics has a beta of 2.37, suggesting that its share price is 137% more volatile than the S&P 500.

Insider and Institutional Ownership

65.5% of Parker Drilling shares are owned by institutional investors. Comparatively, 92.0% of Atwood Oceanics shares are owned by institutional investors. 3.6% of Parker Drilling shares are owned by insiders. Comparatively, 1.2% of Atwood Oceanics shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Parker Drilling and Atwood Oceanics’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Parker Drilling $399.09 million 0.40 $29.23 million ($1.30) -0.88
Atwood Oceanics $605.28 million 0.96 $296.89 million ($0.20) -36.00

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

Profitability

This table compares Parker Drilling and Atwood Oceanics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Parker Drilling -41.31% -43.64% -13.96%
Atwood Oceanics -3.06% 2.25% 1.59%

Analyst Ratings

This is a breakdown of current recommendations for Parker Drilling and Atwood Oceanics, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Parker Drilling 0 2 3 0 2.60
Atwood Oceanics 3 16 4 0 2.04

Parker Drilling currently has a consensus target price of $3.75, suggesting a potential upside of 226.09%. Atwood Oceanics has a consensus target price of $11.35, suggesting a potential upside of 57.60%. Given Parker Drilling’s stronger consensus rating and higher possible upside, research analysts plainly believe Parker Drilling is more favorable than Atwood Oceanics.

Summary

Atwood Oceanics beats Parker Drilling on 10 of the 13 factors compared between the two stocks.

Parker Drilling Company Profile

Parker Drilling Company (Parker Drilling) is a provider of contract drilling, and drilling-related services and rental tools and services. The Company’s business consists of two business lines: drilling services and rental tools services. Its Rental Tools Services business includes U.S. Rental Tools and International Rental Tools segments, and its Drilling Services business includes its U.S. (Lower 48) Drilling, and International & Alaska Drilling segments. In its Drilling Services business, the Company drills oil and gas wells for customers in both the United States and international markets. In its Rental Tools Services business, the Company provides rental equipment and services to exploration and production (E&P) companies, drilling contractors and service companies on land and offshore in the United States and select international markets. As of December 31, 2016, the Company had operations in 20 countries.

Atwood Oceanics Company Profile

Atwood Oceanics, Inc. is an offshore drilling company engaged in the drilling and completion of exploration and development wells for the global oil and gas industry. The Company owns various types of drilling rigs, such as Ultra-Deepwater Rigs, Deepwater Semisubmersibles and Jackups. Its Ultra-deepwater Rigs and Deepwater Semisubmersibles include Atwood Achiever, Atwood Archer, Atwood Admiral, Atwood Advantage, Atwood Condor, Atwood Eagle and Atwood Osprey. Its Jackup Rigs included Atwood Mako, Atwood Manta, Atwood Aurora, Atwood Beacon and Atwood Orca. The Atwood Mako and Atwood Manta, both approximately 400-foot water depth Pacific Class jackup rigs, are operating offshore Vietnam and offshore Thailand. The Atwood Aurora, an approximately 350-foot water depth jackup, is operating offshore West Africa. The Atwood Beacon, an approximately 400-foot water depth jackup, is operating in the Mediterranean Sea.

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