Head to Head Analysis: RPC (NYSE:RES) and Transocean (NYSE:RIG)

RPC (NYSE:RES) and Transocean (NYSE:RIG) are both energy companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, profitability, earnings, risk, analyst recommendations, institutional ownership and dividends.

Institutional and Insider Ownership

41.1% of RPC shares are owned by institutional investors. Comparatively, 67.7% of Transocean shares are owned by institutional investors. 58.8% of RPC shares are owned by insiders. Comparatively, 9.7% of Transocean shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares RPC and Transocean’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
RPC	1.28%	4.82%	3.60%
Transocean	-40.24%	2.60%	1.37%

Analyst Recommendations

This is a breakdown of current ratings and price targets for RPC and Transocean, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
RPC	1	3	0	0	1.75
Transocean	3	4	3	2	2.33

RPC currently has a consensus price target of $6.00, indicating a potential downside of 1.23%. Transocean has a consensus price target of $6.68, indicating a potential upside of 18.31%. Given Transocean’s stronger consensus rating and higher possible upside, analysts plainly believe Transocean is more favorable than RPC.

Risk and Volatility

RPC has a beta of 0.86, meaning that its share price is 14% less volatile than the S&P 500. Comparatively, Transocean has a beta of 1.41, meaning that its share price is 41% more volatile than the S&P 500.

Earnings and Valuation

This table compares RPC and Transocean”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
RPC	$1.63 billion	0.83	$32.08 million	$0.09	67.50
Transocean	$3.96 billion	1.59	-$2.92 billion	($1.88)	-3.00

RPC has higher earnings, but lower revenue than Transocean. Transocean is trading at a lower price-to-earnings ratio than RPC, indicating that it is currently the more affordable of the two stocks.

Summary

Transocean beats RPC on 8 of the 15 factors compared between the two stocks.

About RPC

RPC, Inc., through its subsidiaries, engages provision of a range of oilfield services and equipment for the oil and gas companies involved in the exploration, production, and development of oil and gas properties. The company operates through Technical Services and Support Services segments. The Technical Services segment offers pressure pumping, fracturing, acidizing, cementing, downhole tools, coiled tubing, snubbing, nitrogen, well control, wireline, pump down, and fishing services that are used in the completion, production, and maintenance of oil and gas wells. The Support Services segment provides a range of rental tools for onshore and offshore oil and gas well drilling, completion, and workover activities. This segment also offers oilfield pipe inspection, and pipe management and storage services, as well as well control training and consulting services. It operates in the United States, Africa, Canada, Argentina, China, Mexico, Latin America, the Middle East, and internationally. The company was incorporated in 1984 and is headquartered in Atlanta, Georgia.

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.