Head to Head Comparison: Helmerich & Payne (HP) and Ensco Plc (ESV)
Helmerich & Payne (NYSE: HP) and Ensco Plc (NYSE:ESV) are both mid-cap oil & gas drilling – nec companies, but which is the superior business? We will compare the two businesses based on the strength of their dividends, valuation, risk, profitability, analyst recommendations, earnings and institutional ownership.
This table compares Helmerich & Payne and Ensco Plc’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Helmerich & Payne||-11.19%||-3.37%||-2.24%|
Helmerich & Payne pays an annual dividend of $2.80 per share and has a dividend yield of 5.0%. Ensco Plc pays an annual dividend of $0.04 per share and has a dividend yield of 0.7%. Helmerich & Payne pays out -167.7% of its earnings in the form of a dividend. Ensco Plc pays out -17.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Ensco Plc has increased its dividend for 44 consecutive years. Helmerich & Payne is clearly the better dividend stock, given its higher yield and lower payout ratio.
Earnings & Valuation
This table compares Helmerich & Payne and Ensco Plc’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|Helmerich & Payne||$1.62 billion||3.72||-$56.82 million||($1.67)||-33.34|
|Ensco Plc||$2.78 billion||0.86||$890.20 million||($0.23)||-23.70|
Ensco Plc has higher revenue and earnings than Helmerich & Payne. Helmerich & Payne is trading at a lower price-to-earnings ratio than Ensco Plc, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
Helmerich & Payne has a beta of 1.26, suggesting that its stock price is 26% more volatile than the S&P 500. Comparatively, Ensco Plc has a beta of 1.82, suggesting that its stock price is 82% more volatile than the S&P 500.
Insider and Institutional Ownership
91.1% of Ensco Plc shares are owned by institutional investors. 3.9% of Helmerich & Payne shares are owned by company insiders. Comparatively, 0.6% of Ensco Plc shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
This is a breakdown of current ratings and recommmendations for Helmerich & Payne and Ensco Plc, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Helmerich & Payne||8||13||3||0||1.79|
Helmerich & Payne currently has a consensus price target of $54.15, indicating a potential downside of 2.75%. Ensco Plc has a consensus price target of $8.56, indicating a potential upside of 57.15%. Given Ensco Plc’s stronger consensus rating and higher possible upside, analysts plainly believe Ensco Plc is more favorable than Helmerich & Payne.
Ensco Plc beats Helmerich & Payne on 12 of the 16 factors compared between the two stocks.
About Helmerich & Payne
Helmerich & Payne, Inc. is engaged in contract drilling of oil and gas wells for others. The Company operates in the contract drilling industry. The Company’s contract drilling business consists of three segments: U.S. Land, Offshore and International Land. The Company is also engaged in the ownership, development and operation of commercial real estate and the research and development of rotary steerable technology. Its real estate investments are located within Tulsa, Oklahoma, and include a shopping center containing approximately 441,000 leasable square feet, multi-tenant industrial warehouse properties containing approximately one million leasable square feet and approximately 210 acres of undeveloped real estate. The Company provides drilling rigs, equipment, personnel and camps on a contract basis. The Company’s subsidiaries include Helmerich & Payne International Drilling Co. and Helmerich & Payne de Venezuela, C.A.
About Ensco Plc
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.
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