Contrasting Nabors Industries (NBR) & Pacific Drilling (PACDQ)
Nabors Industries (NYSE: NBR) and Pacific Drilling (OTCMKTS:PACDQ) are both small-cap oils/energy companies, but which is the superior stock? We will compare the two businesses based on the strength of their earnings, analyst recommendations, institutional ownership, dividends, risk, valuation and profitability.
Nabors Industries pays an annual dividend of $0.24 per share and has a dividend yield of 4.0%. Pacific Drilling does not pay a dividend. Nabors Industries pays out -9.0% of its earnings in the form of a dividend. Nabors Industries has raised its dividend for 3 consecutive years.
97.7% of Nabors Industries shares are owned by institutional investors. Comparatively, 0.4% of Pacific Drilling shares are owned by institutional investors. 4.1% of Nabors Industries shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Valuation and Earnings
This table compares Nabors Industries and Pacific Drilling’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Nabors Industries||$2.01 billion||0.85||-$1.03 billion||($2.68)||-2.22|
|Pacific Drilling||$769.47 million||0.02||-$37.15 million||($20.58)||-0.03|
Pacific Drilling has lower revenue, but higher earnings than Nabors Industries. Nabors Industries is trading at a lower price-to-earnings ratio than Pacific Drilling, indicating that it is currently the more affordable of the two stocks.
This is a summary of current recommendations for Nabors Industries and Pacific Drilling, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Nabors Industries currently has a consensus target price of $11.36, suggesting a potential upside of 90.88%. Given Nabors Industries’ higher possible upside, equities research analysts clearly believe Nabors Industries is more favorable than Pacific Drilling.
This table compares Nabors Industries and Pacific Drilling’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Volatility and Risk
Nabors Industries has a beta of 1.6, suggesting that its stock price is 60% more volatile than the S&P 500. Comparatively, Pacific Drilling has a beta of 3.21, suggesting that its stock price is 221% more volatile than the S&P 500.
Nabors Industries beats Pacific Drilling on 13 of the 15 factors compared between the two stocks.
Nabors Industries Company Profile
Nabors Industries Ltd. owns and operates a land-based drilling rig fleet. The Company is a provider of offshore platform drilling rigs in the United States and multiple international markets. The Company conducts its Drilling & Rig Services business through four segments: U.S. Drilling, Canada Drilling, International Drilling and Rig Services. The Company provides wellbore placement services, drilling software and performance tools, drilling equipment and various technologies throughout the oil and gas markets. The Company’s Drilling & Rig Services business comprises land-based and offshore drilling rig operations and other rig services, consisting of equipment manufacturing, rig instrumentation and optimization software. The Company is a provider of directional drilling and measurement while drilling (MWD) systems and services. The Company also provides drilling technology and equipment, and well-site services.
Pacific Drilling Company Profile
Pacific Drilling S.A. is an international offshore drilling contractor. The Company provides offshore drilling services to the oil and natural gas industry through the use of high-specification rigs. The Company’s primary business is to contract its high-specification rigs, related equipment and work crews, primarily on a day rate basis, to drill wells for its clients. The Company is engaged in drillships segment. The Company focuses on the high-specification segment of the floating rig market. The Company considers high-specification requirements to include rigs in water depths of approximately 7,500 feet or projects requiring advanced operating capabilities, such as hook-loads (>800 tons), accommodations (over 200 beds), mud storage and pumping capacity, and deck-load and space capabilities. The Company’s contract drillships operate in the deepwater regions of the United States, Gulf of Mexico and Nigeria.
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