Contrasting Parker Drilling (PKD) and Pioneer Energy Services (PES)

Parker Drilling (NYSE: PKD) and Pioneer Energy Services (NYSE:PES) are both small-cap oils/energy companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, profitability, valuation, earnings, risk and dividends.

Insider and Institutional Ownership

63.5% of Parker Drilling shares are held by institutional investors. Comparatively, 73.7% of Pioneer Energy Services shares are held by institutional investors. 3.6% of Parker Drilling shares are held by company insiders. Comparatively, 6.1% of Pioneer Energy Services shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Parker Drilling and Pioneer Energy Services’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Parker Drilling $427.00 million 0.32 -$230.81 million ($1.08) -0.90
Pioneer Energy Services $277.08 million 0.59 -$128.39 million ($1.34) -1.57

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

Analyst Ratings

This is a summary of current ratings and recommmendations for Parker Drilling and Pioneer Energy Services, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Parker Drilling 0 2 1 0 2.33
Pioneer Energy Services 0 6 4 0 2.40

Pioneer Energy Services has a consensus price target of $4.91, indicating a potential upside of 133.63%. Given Pioneer Energy Services’ stronger consensus rating and higher probable upside, analysts clearly believe Pioneer Energy Services is more favorable than Parker Drilling.

Profitability

This table compares Parker Drilling and Pioneer Energy Services’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Parker Drilling -33.06% -38.07% -11.82%
Pioneer Energy Services -25.19% -26.46% -9.35%

Risk & Volatility

Parker Drilling has a beta of 1.51, meaning that its share price is 51% more volatile than the S&P 500. Comparatively, Pioneer Energy Services has a beta of 2.94, meaning that its share price is 194% more volatile than the S&P 500.

Summary

Pioneer Energy Services beats Parker Drilling on 11 of the 13 factors compared between the two stocks.

Parker Drilling Company Profile

Parker Drilling Company (Parker Drilling) is a provider of contract drilling, and drilling-related services and rental tools and services. The Company’s business consists of two business lines: drilling services and rental tools services. Its Rental Tools Services business includes U.S. Rental Tools and International Rental Tools segments, and its Drilling Services business includes its U.S. (Lower 48) Drilling, and International & Alaska Drilling segments. In its Drilling Services business, the Company drills oil and gas wells for customers in both the United States and international markets. In its Rental Tools Services business, the Company provides rental equipment and services to exploration and production (E&P) companies, drilling contractors and service companies on land and offshore in the United States and select international markets. As of December 31, 2016, the Company had operations in 20 countries.

Pioneer Energy Services Company Profile

Pioneer Energy Services Corp. provides land-based drilling services and production services to a group of independent oil and gas exploration and production companies in the United States and internationally in Colombia. The Company operates through two segments, which include drilling services segment and production services segment. It also provides two of its services (coiled tubing and wireline services) offshore in the Gulf of Mexico. Its drilling services segment provides contract land drilling services to a group of exploration and production companies through the Company’s four drilling divisions in the United States, and internationally in Colombia. Its production services segment provides a range of services to a group of exploration and production companies, with its operations concentrated in the various United States onshore oil and gas producing regions in the Mid-Continent and Rocky Mountain states and in the Gulf Coast.

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