Critical Comparison: Valaris (OTCMKTS:DOFSQ) versus Pacific Drilling (OTCMKTS:PACDQ)

Valaris (OTCMKTS:DOFSQ) and Pacific Drilling (OTCMKTS:PACDQ) are both small-cap oils/energy companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, earnings, profitability, institutional ownership, dividends and risk.

Volatility and Risk

Valaris has a beta of 1.27, suggesting that its share price is 27% more volatile than the S&P 500. Comparatively, Pacific Drilling has a beta of 2.95, suggesting that its share price is 195% more volatile than the S&P 500.

Earnings & Valuation

This table compares Valaris and Pacific Drilling’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Valaris $980.64 million 0.02 -$357.21 million ($2.55) -0.06
Pacific Drilling $319.72 million 0.00 -$525.16 million N/A N/A

Valaris has higher revenue and earnings than Pacific Drilling.

Profitability

This table compares Valaris and Pacific Drilling’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Valaris -122.85% -13.58% -6.76%
Pacific Drilling -164.67% -23.08% -9.18%

Institutional & Insider Ownership

53.7% of Valaris shares are owned by institutional investors. 0.3% of Valaris shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of current recommendations and price targets for Valaris and Pacific Drilling, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Valaris 0 0 0 0 N/A
Pacific Drilling 0 0 0 0 N/A

Summary

Valaris beats Pacific Drilling on 7 of the 8 factors compared between the two stocks.

About Valaris

Diamond Offshore Drilling, Inc. provides contract drilling services to the energy industry worldwide. The company operates a fleet of 15 offshore drilling rigs, including 4 drillships and 11 semisubmersible rigs. It serves independent oil and gas companies, and government-owned oil companies. The company was founded in 1953 and is headquartered in Houston, Texas. Diamond Offshore Drilling, Inc. is a subsidiary of Loews Corporation. On April 26, 2020, Diamond Offshore Drilling, Inc., along with its affiliates, filed a voluntary petition for reorganization under Chapter 11 in the U.S. Bankruptcy Court for the Southern District of Texas.

About Pacific Drilling

Pacific Drilling S.A., together with its subsidiaries, operates as an offshore drilling contractor. It provides offshore drilling services to the oil and natural gas industry. The company contracts its fleet of rigs to drill wells for its customers. It has a fleet of seven drillships. The company was founded in 2006 and is headquartered in Houston, Texas. Pacific Drilling S.A. is a subsidiary of Quantum Pacific International Limited. On November 12, 2017, Pacific Drilling S.A., along with its affiliates, filed a voluntary petition for reorganization under Chapter 11 in the US Bankruptcy Court for the Southern District of New York.

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