Transocean (NYSE:RIG – Get Free Report) and Natural Gas Services Group (NYSE:NGS – Get Free Report) are both energy companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, risk, valuation, dividends, analyst recommendations, institutional ownership and profitability.
Risk and Volatility
Transocean has a beta of 1.32, suggesting that its stock price is 32% more volatile than the S&P 500. Comparatively, Natural Gas Services Group has a beta of 0.42, suggesting that its stock price is 58% less volatile than the S&P 500.
Profitability
This table compares Transocean and Natural Gas Services Group’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Transocean | -40.24% | 2.60% | 1.37% |
| Natural Gas Services Group | 10.81% | 8.24% | 3.92% |
Earnings and Valuation
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Transocean | $3.96 billion | 1.61 | -$2.92 billion | ($1.88) | -3.05 |
| Natural Gas Services Group | $172.32 million | 2.75 | $19.93 million | $1.72 | 21.34 |
Natural Gas Services Group has lower revenue, but higher earnings than Transocean. Transocean is trading at a lower price-to-earnings ratio than Natural Gas Services Group, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
67.7% of Transocean shares are owned by institutional investors. Comparatively, 65.6% of Natural Gas Services Group shares are owned by institutional investors. 9.7% of Transocean shares are owned by insiders. Comparatively, 3.1% of Natural Gas Services Group 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.
Analyst Ratings
This is a breakdown of current ratings and recommmendations for Transocean and Natural Gas Services Group, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Transocean | 3 | 4 | 3 | 1 | 2.18 |
| Natural Gas Services Group | 0 | 0 | 3 | 1 | 3.25 |
Transocean currently has a consensus price target of $6.68, suggesting a potential upside of 16.66%. Natural Gas Services Group has a consensus price target of $50.50, suggesting a potential upside of 37.58%. Given Natural Gas Services Group’s stronger consensus rating and higher probable upside, analysts clearly believe Natural Gas Services Group is more favorable than Transocean.
Summary
Natural Gas Services Group beats Transocean on 9 of the 13 factors compared between the two stocks.
About Transocean
Transocean Ltd., together with its subsidiaries, provides offshore contract drilling services for oil and gas wells worldwide. It contracts mobile offshore drilling rigs, related equipment, and work crews to drill oil and gas wells. The company operates a fleet of mobile offshore drilling units, consisting of ultra-deepwater floaters and harsh environment floaters. It serves integrated energy companies, government-owned or government-controlled energy companies, and other independent energy companies. The company was founded in 1926 and is based in Steinhausen, Switzerland.
About Natural Gas Services Group
Natural Gas Services Group, Inc. provides natural gas compression equipment and services to the energy industry in the United States. It engineers and fabricates, operates, rents, and maintains natural gas compressors for oil and natural gas production and plant facilities. It also designs, fabricates, and assembles compressor units for rental or sale; and designs, manufactures, and sells a line of reciprocating natural gas compressor frames, cylinders, and parts. In addition, the company offers flare stacks and related ignition and control devices for the onshore and offshore incineration of gas compounds, such as hydrogen sulfide, carbon dioxide, natural gas, and liquefied petroleum gases. Further, it provides aftermarket services for its compressor and flare sales business; and exchange and rebuild program for small horsepower screw compressors. It markets its products to exploration and production companies that utilize compressor units for artificial lift applications; and oil and natural gas exploration and production companies. Natural Gas Services Group, Inc. was incorporated in 1998 and is headquartered in Midland, Texas.
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