Head-To-Head Analysis: Diamond Offshore Drilling (DO) and Noble (NE)

Diamond Offshore Drilling (NYSE: DO) and Noble (NYSE:NE) are both oils/energy companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, profitability, analyst recommendations, valuation, risk, dividends and institutional ownership.

Volatility and Risk

Diamond Offshore Drilling has a beta of 1.16, indicating that its stock price is 16% more volatile than the S&P 500. Comparatively, Noble has a beta of 2.2, indicating that its stock price is 120% more volatile than the S&P 500.

Institutional and Insider Ownership

84.4% of Noble shares are held by institutional investors. 0.0% of Diamond Offshore Drilling shares are held by company insiders. Comparatively, 1.0% of Noble shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares Diamond Offshore Drilling and Noble’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Diamond Offshore Drilling 1.00% 1.78% 1.09%
Noble -32.20% -6.29% -3.46%

Valuation & Earnings

This table compares Diamond Offshore Drilling and Noble’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Diamond Offshore Drilling $1.49 billion 1.93 $18.34 million $0.82 25.44
Noble $1.24 billion 1.26 -$516.51 million ($1.14) -5.55

Diamond Offshore Drilling has higher revenue and earnings than Noble. Noble is trading at a lower price-to-earnings ratio than Diamond Offshore Drilling, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current recommendations for Diamond Offshore Drilling and Noble, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Diamond Offshore Drilling 11 7 1 0 1.47
Noble 2 11 2 0 2.00

Diamond Offshore Drilling presently has a consensus target price of $13.92, suggesting a potential downside of 33.25%. Noble has a consensus target price of $4.76, suggesting a potential downside of 24.78%. Given Noble’s stronger consensus rating and higher probable upside, analysts clearly believe Noble is more favorable than Diamond Offshore Drilling.

Summary

Diamond Offshore Drilling beats Noble on 8 of the 14 factors compared between the two stocks.

Diamond Offshore Drilling Company Profile

Diamond Offshore Drilling, Inc. provides contract drilling services to the energy industry worldwide. It provides services in floater market, including ultra-deepwater, deepwater, and mid-water. The company operates a fleet of 17 offshore drilling rigs, which comprises 4 drillships, 7 ultra-deepwater, 4 deepwater, and 2 mid-water semisubmersibles. It serves independent oil and gas companies, and government-owned oil companies. The company was founded in 1989 and is headquartered in Houston, Texas. Diamond Offshore Drilling, Inc. is a subsidiary of Loews Corporation.

Noble Company Profile

Noble Corporation plc operates as an offshore drilling contractor for the oil and gas industry worldwide. It provides contract drilling services using mobile offshore drilling units. As of December 31, 2017, the company operated a fleet of 8 drill ships, 6 semisubmersibles, and 14 jack ups. Noble Corporation plc was founded in 1921 and is headquartered in London, the United Kingdom.

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