Financial Comparison: Precision Drilling (PDS) and Oasis Midstream Partners (OMP)

Precision Drilling (NYSE: PDS) and Oasis Midstream Partners (NYSE:OMP) are both small-cap oils/energy companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, analyst recommendations, valuation, dividends, risk, profitability and institutional ownership.

Dividends

Oasis Midstream Partners pays an annual dividend of $1.57 per share and has a dividend yield of 8.4%. Precision Drilling does not pay a dividend. Oasis Midstream Partners pays out 365.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Recommendations

This is a breakdown of recent ratings for Precision Drilling and Oasis Midstream Partners, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Precision Drilling 1 4 5 2 2.67
Oasis Midstream Partners 0 2 8 0 2.80

Precision Drilling presently has a consensus target price of $4.45, indicating a potential upside of 33.63%. Oasis Midstream Partners has a consensus target price of $21.50, indicating a potential upside of 15.41%. Given Precision Drilling’s higher possible upside, research analysts clearly believe Precision Drilling is more favorable than Oasis Midstream Partners.

Valuation and Earnings

This table compares Precision Drilling and Oasis Midstream Partners’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Precision Drilling $1.04 billion 0.94 -$101.85 million ($0.28) -11.89
Oasis Midstream Partners $182.22 million 2.81 $49.21 million $0.43 43.33

Oasis Midstream Partners has lower revenue, but higher earnings than Precision Drilling. Precision Drilling is trading at a lower price-to-earnings ratio than Oasis Midstream Partners, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Precision Drilling and Oasis Midstream Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Precision Drilling -9.47% -5.51% -2.56%
Oasis Midstream Partners N/A N/A N/A

Insider & Institutional Ownership

49.2% of Precision Drilling shares are held by institutional investors. Comparatively, 22.8% of Oasis Midstream Partners shares are held by institutional investors. 1.0% of Precision Drilling shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Summary

Oasis Midstream Partners beats Precision Drilling on 10 of the 16 factors compared between the two stocks.

Precision Drilling Company Profile

Precision Drilling Corporation provides oil and natural gas drilling and related services and products. The company operates in two segments, Contract Drilling Services, and Completion and Production Services. The Contract Drilling Services segment offers onshore well drilling services to exploration and production companies in the oil and natural gas industry. This segment's services include land drilling, directional drilling, and turnkey drilling; and procurement and distribution of oilfield supplies, as well as manufacture and refurbishment of drilling and service rig equipment. As of December 31, 2016, this segment operated 255 land drilling rigs, including 135 in Canada; 103 in the United States; 5 in Mexico; 4 in Saudi Arabia; 5 in Kuwait; 2 in the Kurdistan region of Iraq; and 1 in the country of Georgia. The Completion and Production Services segment offers completion and workover services, and ancillary services to oil and natural gas exploration and production companies. It provides service rigs for well completion, workover, abandonment, maintenance, and re-entry preparation services; snubbing units for pressure control services; camp and catering services; and water system services. This segment also engages in the rental of oilfield surface equipment, and wellsite accommodations. This segment operated 196 well completion and workover service rigs, and 11 snubbing units in Canada and the United States; approximately 2,200 oilfield rental items, including surface storage, small-flow wastewater treatment, and power generation and solids control equipment; and 132 wellsite accommodation units in Canada. It also had 43 drilling camps and 4 base camps in Canada; and 10 large-flow wastewater treatment units, 24 pump houses, and 8 potable water production units in Canada. Precision Drilling Corporation was founded in 1951 and is headquartered in Calgary, Canada.

Oasis Midstream Partners Company Profile

Oasis Midstream Partners LP provides crude oil, natural gas, and water-related midstream services in North America. It is involved in various activities, including natural gas gathering, compression, processing, and gas lift supply; crude oil gathering, stabilization, blending, and storage; gathering, transportation, gathering and disposal of produced and flow back water; freshwater distribution; and supply and distribution of fracwater and flushwater. OMP GP LLC serves as the general partner of the company. Oasis Midstream Partners LP was founded in 2013 and is based in Houston, Texas. The company is a subsidiary of OMS Holdings LLC.

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