Precision Drilling Corporation (PDS) vs. Rowan Companies PLC (RDC) Head to Head Comparison

Rowan Companies PLC (NYSE: RDC) and Precision Drilling Corporation (NYSE:PDS) are both small-cap oils/energy companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, analyst recommendations, dividends, valuation, institutional ownership, profitability and risk.

Valuation & Earnings

This table compares Rowan Companies PLC and Precision Drilling Corporation’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Rowan Companies PLC $1.84 billion 0.95 $320.60 million ($0.52) -26.67
Precision Drilling Corporation $718.34 million 1.11 -$117.47 million ($0.30) -9.07

Rowan Companies PLC has higher revenue and earnings than Precision Drilling Corporation. Rowan Companies PLC is trading at a lower price-to-earnings ratio than Precision Drilling Corporation, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Rowan Companies PLC has a beta of 1.9, meaning that its stock price is 90% more volatile than the S&P 500. Comparatively, Precision Drilling Corporation has a beta of 1.77, meaning that its stock price is 77% more volatile than the S&P 500.

Profitability

This table compares Rowan Companies PLC and Precision Drilling Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Rowan Companies PLC -4.76% -0.61% -0.38%
Precision Drilling Corporation -9.45% -5.93% -2.73%

Analyst Recommendations

This is a summary of current ratings and recommmendations for Rowan Companies PLC and Precision Drilling Corporation, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Rowan Companies PLC 2 11 6 0 2.21
Precision Drilling Corporation 1 5 7 1 2.57

Rowan Companies PLC presently has a consensus price target of $16.43, suggesting a potential upside of 18.45%. Precision Drilling Corporation has a consensus price target of $5.04, suggesting a potential upside of 85.20%. Given Precision Drilling Corporation’s stronger consensus rating and higher possible upside, analysts plainly believe Precision Drilling Corporation is more favorable than Rowan Companies PLC.

Institutional & Insider Ownership

50.5% of Precision Drilling Corporation shares are owned by institutional investors. 0.8% of Rowan Companies PLC shares are owned by insiders. Comparatively, 1.0% of Precision Drilling Corporation shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Summary

Precision Drilling Corporation beats Rowan Companies PLC on 8 of the 14 factors compared between the two stocks.

Rowan Companies PLC Company Profile

Rowan Companies plc is a provider of offshore contract drilling services to the international oil and gas industry. The Company operates through two segments: deepwater and jack-ups. Its deepwater segment consists of drillship operations. As of December 31, 2016, the Company’s fleet consisted of 29 mobile offshore drilling units, including 25 self-elevating jack-up rigs and four ultra-deepwater drillships. The Company’s fleet operates across the world, including the United States Gulf of Mexico (US GOM), the United Kingdom and Norwegian sectors of the North Sea, the Middle East and Trinidad. As of February 14, 2017, the Company’s drilling fleet consisted of four ultra-deepwater drillships; 19 high-specification cantilever jack-up rigs, and six premium cantilever jack-up rigs. Its jack-ups are capable of drilling wells to maximum depths ranging from 25,000 to 40,000 feet and in maximum water depths ranging from 300 to 550 feet, depending on rig size, location and outfitting.

Precision Drilling Corporation Company Profile

Precision Drilling Corporation (Precision) is an oilfield services company. The Company provides onshore drilling and completion and production services to exploration and production companies in the oil and natural gas industry. The Company operates through two segments: Contract Drilling Services, and Completion and Production Services. The Contract Drilling Services segment operates its rigs in Canada, the United States and internationally. The Completion and Production Services segment provides completion and workover services and ancillary services to oil and natural gas exploration and production companies in Canada and the United States. As of December 31, 2016, the Contract Drilling Services segment consisted of 255 land drilling rigs, including 135 in Canada, 103 in the United States, five in Mexico, four in Saudi Arabia, five in Kuwait, two in the Kurdistan region of Iraq and one in the country of Georgia.

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