Pioneer Energy Services Corp. (NYSE: PES) and Parker Drilling (NYSE:PKD) are both small-cap oil & gas drilling – nec companies, but which is the superior stock? We will compare the two businesses based on the strength of their valuation, profitability, institutional ownership, analyst recommendations, risk, earnings and dividends.

Institutional and Insider Ownership

73.9% of Pioneer Energy Services Corp. shares are held by institutional investors. Comparatively, 64.5% of Parker Drilling shares are held by institutional investors. 6.1% of Pioneer Energy Services Corp. shares are held by company insiders. Comparatively, 3.6% of Parker Drilling shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Pioneer Energy Services Corp. and Parker Drilling, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Pioneer Energy Services Corp. 0 6 4 0 2.40
Parker Drilling 0 2 1 0 2.33

Pioneer Energy Services Corp. currently has a consensus price target of $4.91, indicating a potential upside of 145.31%. Given Pioneer Energy Services Corp.’s stronger consensus rating and higher probable upside, research analysts clearly believe Pioneer Energy Services Corp. is more favorable than Parker Drilling.

Profitability

This table compares Pioneer Energy Services Corp. and Parker Drilling’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Pioneer Energy Services Corp. -25.19% -26.46% -9.35%
Parker Drilling -33.06% -38.07% -11.82%

Risk & Volatility

Pioneer Energy Services Corp. has a beta of 2.9, suggesting that its stock price is 190% more volatile than the S&P 500. Comparatively, Parker Drilling has a beta of 1.54, suggesting that its stock price is 54% more volatile than the S&P 500.

Earnings and Valuation

This table compares Pioneer Energy Services Corp. and Parker Drilling’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Pioneer Energy Services Corp. $277.08 million 0.56 -$128.39 million ($1.34) -1.49
Parker Drilling $427.00 million 0.36 -$230.81 million ($1.08) -1.02

Pioneer Energy Services Corp. has higher revenue, but lower earnings than Parker Drilling. Pioneer Energy Services Corp. is trading at a lower price-to-earnings ratio than Parker Drilling, indicating that it is currently the more affordable of the two stocks.

Summary

Pioneer Energy Services Corp. beats Parker Drilling on 11 of the 13 factors compared between the two stocks.

About Pioneer Energy Services Corp.

Pioneer Energy Services Corp. provides land-based drilling services and production services to a group of independent oil and gas exploration and production companies in the United States and internationally in Colombia. The Company operates through two segments, which include drilling services segment and production services segment. It also provides two of its services (coiled tubing and wireline services) offshore in the Gulf of Mexico. Its drilling services segment provides contract land drilling services to a group of exploration and production companies through the Company’s four drilling divisions in the United States, and internationally in Colombia. Its production services segment provides a range of services to a group of exploration and production companies, with its operations concentrated in the various United States onshore oil and gas producing regions in the Mid-Continent and Rocky Mountain states and in the Gulf Coast.

About Parker Drilling

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.

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