Critical Review: Ensco Plc (ESV) vs. Seadrill Limited (SDRL)
Ensco Plc (NYSE: ESV) and Seadrill Limited (NYSE:SDRL) are both small-cap oils/energy companies, but which is the better stock? We will compare the two businesses based on the strength of their analyst recommendations, risk, earnings, institutional ownership, dividends, valuation and profitability.
This table compares Ensco Plc and Seadrill Limited’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Insider and Institutional Ownership
91.6% of Ensco Plc shares are held by institutional investors. Comparatively, 21.9% of Seadrill Limited shares are held by institutional investors. 0.6% of Ensco Plc shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.
Risk & Volatility
Ensco Plc has a beta of 1.75, indicating that its share price is 75% more volatile than the S&P 500. Comparatively, Seadrill Limited has a beta of 2.9, indicating that its share price is 190% more volatile than the S&P 500.
Ensco Plc pays an annual dividend of $0.04 per share and has a dividend yield of 0.7%. Seadrill Limited does not pay a dividend. Ensco Plc pays out 23.5% of its earnings in the form of a dividend. Ensco Plc has increased its dividend for 7 consecutive years.
This is a breakdown of recent recommendations and price targets for Ensco Plc and Seadrill Limited, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Ensco Plc currently has a consensus target price of $9.05, suggesting a potential upside of 68.16%. Given Ensco Plc’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Ensco Plc is more favorable than Seadrill Limited.
Valuation & Earnings
This table compares Ensco Plc and Seadrill Limited’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Ensco Plc||$1.98 billion||0.83||$716.60 million||$0.17||31.65|
|Seadrill Limited||$2.37 billion||0.06||$1.15 billion||($1.18)||-0.23|
Seadrill Limited has higher revenue and earnings than Ensco Plc. Seadrill Limited is trading at a lower price-to-earnings ratio than Ensco Plc, indicating that it is currently the more affordable of the two stocks.
Ensco Plc beats Seadrill Limited on 11 of the 17 factors compared between the two stocks.
Ensco Plc Company Profile
Ensco plc is an offshore contract drilling company. The Company provides offshore contract drilling services to the international oil and gas industry. Its segments include Floaters, Jackups and Other. The Floaters segment includes its drillships and semisubmersible rigs, and provides contract drilling. Other consists of management services on rigs owned by third parties. The Floaters and the Jackups segments provide contract drilling. It owned and operated an offshore drilling rig fleet of 57 rigs, including two rigs under construction, with drilling operations around the world, as of December 31, 2016. As of December 31, 2016, its rig fleet included eight drill ships, 10 dynamically positioned semisubmersible rigs, three moored semisubmersible rigs and 38 jackup rigs. As of December 31, 2016, of its 59 rigs, 25 were located in the Middle East, Africa and Asia Pacific, 16 were located in North and South America (including Brazil) and 18 were located in Europe and the Mediterranean.
Seadrill Limited Company Profile
Seadrill Limited is an offshore drilling contractor providing offshore drilling services to the oil and gas industry. The Company’s primary business is the ownership and operation of drillships, semi-submersible rigs and jack-up rigs for operations in shallow-, mid-, deep-, and ultra deepwater areas, and in benign and harsh environments. The Company’s segments are Floaters and Jack-ups. The Company offers services encompassing drilling, completion and maintenance of offshore exploration and production wells. The Company contracts its drilling units primarily on a dayrate basis to drill wells for its customers. The Company has a fleet of approximately 38 offshore drilling units consisting of over 12 semi-submersible rigs, approximately seven drillships and over 19 jack-up rigs in operation, and contracts for the construction of approximately 13 offshore drilling units. The Company also provides management services to certain unconsolidated companies in which its holds investments.
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