Patterson-UTI Energy (NASDAQ: PTEN) and Atwood Oceanics (NYSE:ATW) are both oils/energy companies, but which is the superior stock? We will compare the two businesses based on the strength of their valuation, institutional ownership, analyst recommendations, profitability, dividends, risk and earnings.

Profitability

This table compares Patterson-UTI Energy and Atwood Oceanics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Patterson-UTI Energy -23.78% -10.03% -6.29%
Atwood Oceanics -3.71% -0.51% -0.36%

Valuation and Earnings

This table compares Patterson-UTI Energy and Atwood Oceanics’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Patterson-UTI Energy $1.34 billion 2.76 $260.21 million ($1.97) -8.87
Atwood Oceanics $605.28 million 0.96 $296.89 million ($0.20) -36.10

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

Insider and Institutional Ownership

98.6% of Patterson-UTI Energy shares are held by institutional investors. Comparatively, 92.0% of Atwood Oceanics shares are held by institutional investors. 4.6% of Patterson-UTI Energy shares are held by company insiders. Comparatively, 1.2% of Atwood Oceanics shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Volatility & Risk

Patterson-UTI Energy has a beta of 0.98, suggesting that its stock price is 2% less volatile than the S&P 500. Comparatively, Atwood Oceanics has a beta of 2.37, suggesting that its stock price is 137% more volatile than the S&P 500.

Dividends

Patterson-UTI Energy pays an annual dividend of $0.08 per share and has a dividend yield of 0.5%. Atwood Oceanics does not pay a dividend. Patterson-UTI Energy pays out -4.1% of its earnings in the form of a dividend.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Patterson-UTI Energy and Atwood Oceanics, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Patterson-UTI Energy 0 12 17 0 2.59
Atwood Oceanics 3 16 4 0 2.04

Patterson-UTI Energy presently has a consensus target price of $27.41, suggesting a potential upside of 56.89%. Atwood Oceanics has a consensus target price of $11.35, suggesting a potential upside of 57.16%. Given Atwood Oceanics’ higher probable upside, analysts clearly believe Atwood Oceanics is more favorable than Patterson-UTI Energy.

Summary

Patterson-UTI Energy beats Atwood Oceanics on 8 of the 15 factors compared between the two stocks.

Patterson-UTI Energy Company Profile

Patterson-UTI Energy, Inc. is an oilfield services company. The Company owns and operates a fleet of land-based drilling rigs and a fleet of pressure pumping equipment in the United States. The Company’s segments include Contract Drilling, Pressure Pumping and Other operations. The Contract Drilling segment markets its contract drilling services to independent and other oil and natural gas operators. As of December 31, 2016, the Company had 202 marketed land-based drilling rigs. The Pressure Pumping segment provides pressure pumping services to oil and natural gas operators primarily in Texas (Southwest Region) and the Appalachian region (Northeast Region). The Other operations segment includes the Company’s pipe handling components and related technology business, the oil and natural gas working interests and the Middle East/North Africa business. In addition, the Company owns and invests in oil and natural gas assets as a non-operating working interest owner in Texas and New Mexico.

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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