Financial Contrast: Patterson-UTI Energy (PTEN) versus Ocean Rig (ORIG)

Patterson-UTI Energy (NASDAQ: PTEN) and Ocean Rig (NASDAQ:ORIG) are both mid-cap oils/energy companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, dividends, profitability, valuation, institutional ownership, earnings and analyst recommendations.

Valuation and Earnings

This table compares Patterson-UTI Energy and Ocean Rig’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Patterson-UTI Energy $2.36 billion 2.15 $5.91 million ($0.80) -28.53
Ocean Rig $1.01 billion 2.45 -$5.40 million N/A N/A

Patterson-UTI Energy has higher revenue and earnings than Ocean Rig.

Institutional and Insider Ownership

97.5% of Patterson-UTI Energy shares are held by institutional investors. Comparatively, 81.3% of Ocean Rig shares are held by institutional investors. 3.7% of Patterson-UTI Energy shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

This table compares Patterson-UTI Energy and Ocean Rig’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Patterson-UTI Energy 1.22% -3.54% -2.37%
Ocean Rig N/A N/A N/A

Analyst Ratings

This is a summary of recent ratings and recommmendations for Patterson-UTI Energy and Ocean Rig, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Patterson-UTI Energy 0 4 17 0 2.81
Ocean Rig 0 1 2 0 2.67

Patterson-UTI Energy presently has a consensus price target of $26.19, indicating a potential upside of 14.73%. Ocean Rig has a consensus price target of $30.00, indicating a potential upside of 11.15%. Given Patterson-UTI Energy’s stronger consensus rating and higher probable upside, equities analysts plainly believe Patterson-UTI Energy is more favorable than Ocean Rig.

Dividends

Patterson-UTI Energy pays an annual dividend of $0.08 per share and has a dividend yield of 0.4%. Ocean Rig does not pay a dividend. Patterson-UTI Energy pays out -10.0% of its earnings in the form of a dividend.

Volatility & Risk

Patterson-UTI Energy has a beta of 1.2, suggesting that its share price is 20% more volatile than the S&P 500. Comparatively, Ocean Rig has a beta of 1.31, suggesting that its share price is 31% more volatile than the S&P 500.

Summary

Patterson-UTI Energy beats Ocean Rig on 10 of the 14 factors compared between the two stocks.

Patterson-UTI Energy Company Profile

Patterson-UTI Energy, Inc., through its subsidiaries, provides onshore contract drilling services to oil and natural gas operators in the United States and Canada. It operates through two segments, Contract Drilling and Pressure Pumping. The Contract Drilling segment markets its contract drilling services primarily in Texas, southeastern New Mexico, northern Louisiana, Colorado, Wyoming, North Dakota, western Oklahoma, Pennsylvania, Ohio, West Virginia, and western Canada. As of December 31, 2017, this segment had a drilling fleet of 295 marketable land-based drilling rigs. The Pressure Pumping segment offers pressure pumping services that consist of well stimulation and cementing for the completion of new wells and remedial work on existing wells, as well as hydraulic fracturing, nitrogen, cementing, and acid pumping services in Texas, the Mid-Continent, and the Appalachian region. Patterson-UTI Energy, Inc. also manufactures and sells pipe handling components and related technology to drilling contractors in North America and other markets; and owns and invests in oil and natural gas assets as a non-operating working interest owner located principally in Texas and New Mexico. Patterson-UTI Energy, Inc. was founded in 1978 and is headquartered in Houston, Texas.

Ocean Rig Company Profile

Ocean Rig UDW Inc., an offshore drilling contractor, provides oilfield services for offshore oil and gas exploration, development, and production drilling worldwide. It specializes in the ultra-deepwater and harsh-environment segment of the offshore drilling industry. The company owns and operates two fifth generation harsh weather ultra-deepwater semisubmersible offshore drilling units under the Leiv Eiriksson and Eirik Raude names; five sixth generation ultra-deepwater drilling units under the Ocean Rig Corcovado, the Ocean Rig Olympia, the Ocean Rig Poseidon, and the Ocean Rig Mykonos names; and four seventh generation drilling units under the Ocean Rig Mylos, the Ocean Rig Skyros, the Ocean Rig Athena, and the Ocean Rig Apollo names. It serves oil companies, integrated oil and gas companies, state-owned national oil companies, and independent oil and gas companies. The company is based in George Town, the Cayman Islands.

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