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

Earnings and Valuation

This table compares Rowan Companies PLC and Atwood Oceanics’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Rowan Companies PLC $1.43 billion 0.88 $627.20 million ($0.31) -32.16
Atwood Oceanics $605.28 million 0.94 $296.89 million ($0.20) -35.25

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

Insider and Institutional Ownership

92.0% of Atwood Oceanics shares are held by institutional investors. 0.8% of Rowan Companies PLC 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 large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Profitability

This table compares Rowan Companies PLC and Atwood Oceanics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Rowan Companies PLC -2.62% 0.51% 0.31%
Atwood Oceanics -3.06% 2.25% 1.59%

Analyst Recommendations

This is a summary of current ratings for Rowan Companies PLC and Atwood Oceanics, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Rowan Companies PLC 2 14 6 0 2.18
Atwood Oceanics 3 16 4 0 2.04

Rowan Companies PLC presently has a consensus target price of $16.40, suggesting a potential upside of 64.47%. Atwood Oceanics has a consensus target price of $11.35, suggesting a potential upside of 60.95%. Given Rowan Companies PLC’s stronger consensus rating and higher probable upside, research analysts plainly believe Rowan Companies PLC is more favorable than Atwood Oceanics.

Risk & Volatility

Rowan Companies PLC has a beta of 1.8, suggesting that its stock price is 80% more 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.

Summary

Atwood Oceanics beats Rowan Companies PLC on 7 of the 13 factors compared between the two stocks.

About Rowan Companies PLC

Rowan Companies plc is a provider of offshore contract drilling services to the international oil and gas industry. The Company operates through two segments: deepwater and jack-ups. Its deepwater segment consists of drillship operations. As of December 31, 2016, the Company’s fleet consisted of 29 mobile offshore drilling units, including 25 self-elevating jack-up rigs and four ultra-deepwater drillships. The Company’s fleet operates across the world, including the United States Gulf of Mexico (US GOM), the United Kingdom and Norwegian sectors of the North Sea, the Middle East and Trinidad. As of February 14, 2017, the Company’s drilling fleet consisted of four ultra-deepwater drillships; 19 high-specification cantilever jack-up rigs, and six premium cantilever jack-up rigs. Its jack-ups are capable of drilling wells to maximum depths ranging from 25,000 to 40,000 feet and in maximum water depths ranging from 300 to 550 feet, depending on rig size, location and outfitting.

About Atwood Oceanics

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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