Head-To-Head Survey: Ranger Energy Services (NYSE:RNGR) versus Precision Drilling (NYSE:PDS)

Ranger Energy Services (NYSE:RNGR) and Precision Drilling (NYSE:PDS) are both small-cap energy companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, earnings, analyst recommendations, dividends, profitability, risk and valuation.

Dividends

Ranger Energy Services pays an annual dividend of $0.24 per share and has a dividend yield of 1.4%. Precision Drilling pays an annual dividend of ($100.00) per share and has a dividend yield of -108.9%. Ranger Energy Services pays out 40.0% of its earnings in the form of a dividend. Precision Drilling pays out 4,784.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Ranger Energy Services has increased its dividend for 2 consecutive years. Ranger Energy Services is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider and Institutional Ownership

68.1% of Ranger Energy Services shares are owned by institutional investors. Comparatively, 48.9% of Precision Drilling shares are owned by institutional investors. 2.8% of Ranger Energy Services shares are owned by insiders. Comparatively, 0.9% of Precision Drilling shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Risk and Volatility

Ranger Energy Services has a beta of 0.12, suggesting that its stock price is 88% less volatile than the S&P 500. Comparatively, Precision Drilling has a beta of 0.78, suggesting that its stock price is 22% less volatile than the S&P 500.

Earnings & Valuation

This table compares Ranger Energy Services and Precision Drilling”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ranger Energy Services	$546.90 million	0.73	$12.30 million	$0.60	28.57
Precision Drilling	$1.92 billion	0.61	$1.32 million	($2.09)	-43.92

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

Profitability

This table compares Ranger Energy Services and Precision Drilling’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ranger Energy Services	2.36%	4.87%	3.33%
Precision Drilling	-1.68%	2.11%	1.24%

Analyst Recommendations

This is a summary of recent ratings and price targets for Ranger Energy Services and Precision Drilling, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ranger Energy Services	0	2	1	0	2.33
Precision Drilling	2	1	4	1	2.50

Ranger Energy Services currently has a consensus target price of $20.00, indicating a potential upside of 16.69%. Precision Drilling has a consensus target price of $122.33, indicating a potential upside of 33.28%. Given Precision Drilling’s stronger consensus rating and higher possible upside, analysts clearly believe Precision Drilling is more favorable than Ranger Energy Services.

Summary

Ranger Energy Services beats Precision Drilling on 12 of the 18 factors compared between the two stocks.

About Ranger Energy Services

Ranger Energy Services, Inc. provides onshore high specification well service rigs, wireline services, and complementary services to exploration and production companies in the United States. It operates through three segments: High Specification Rigs, Wireline Services, and Processing Solutions and Ancillary Services. The High Specification Rigs segment offers well service rigs and complementary equipment and services to facilitate operations throughout the lifecycle of a well; and well maintenance services. This segment also has a fleet of 402 well service rigs. The Wireline Services segment provides wireline production and intervention services to provide information to identify and resolve well production problems through cased hole logging, perforating, mechanical, and pipe recovery services; wireline completion services that are used primarily for pump down perforating operations to create perforations or entry holes through the production casing; and pumping services. This segment also has a fleet of 66 wireline units and 29 high-pressure pump trucks. The Processing Solutions and Ancillary Services segment rents well service-related equipment consisting of fluid pumps, power swivels, well control packages, hydraulic catwalks, frac tanks, pipe racks, and pipe handling tools; and coiled tubing, decommissioning, and snubbing services, as well as provides proprietary and modular equipment for the processing of natural gas streams. This segment also engages in the rental, installation, commissioning, start up, operation, and maintenance of mechanical refrigeration units, nitrogen gas liquid stabilizer units, nitrogen gas liquid storage units, and related equipment. Ranger Energy Services, Inc. was incorporated in 2017 and is headquartered in Houston, Texas.

About Precision Drilling

Precision Drilling Corporation, a drilling company, provides onshore drilling, completion, and production services to exploration and production companies in the oil and natural gas and geothermal industries in North America and the Middle East. The company operates through Contract Drilling Services and Completion and Production Services segments. The Contract Drilling Services segment offers onshore well drilling services to exploration and production companies in the geothermal, oil and natural gas industry. This segment offers services include land and turnkey drilling; and procurement and distribution of oilfield supplies, as well as manufacture and repair of drilling and service rig equipment. In addition, it operates land drilling rigs in Canada, the United States, and the Middle East, as well as operates AlphaAutomation, AlphaApps, and AlphaAnalytics data services. The company offers EverGreen suite of environmental solutions comprising EverGreenMonitoring, EverGreenEnergy, and EverGreen Fuel Cell. The Completion and Production Services segment provides service rigs for well completion, workover, abandonment, maintenance, and re-entry preparation services; equipment rentals; and camp and catering services to oil and natural gas exploration and production companies. This segment operates well completion and workover service rigs in Canada and the United States. Precision Drilling Corporation was founded in 1951 and is headquartered in Calgary, Canada.