Borr Drilling (NYSE:BORR) & Precision Drilling (NYSE:PDS) Critical Analysis

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

Risk & Volatility

Borr Drilling has a beta of 5.46, suggesting that its share price is 446% more volatile than the S&P 500. Comparatively, Precision Drilling has a beta of 3.24, suggesting that its share price is 224% more volatile than the S&P 500.

Profitability

This table compares Borr Drilling and Precision Drilling’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Borr Drilling -89.94% -22.75% -8.67%
Precision Drilling -4.33% -2.26% -1.04%

Valuation and Earnings

This table compares Borr Drilling and Precision Drilling’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Borr Drilling $334.10 million 0.22 -$297.60 million N/A N/A
Precision Drilling $1.05 billion 0.16 $4.99 million N/A N/A

Precision Drilling has higher revenue and earnings than Borr Drilling.

Analyst Recommendations

This is a breakdown of current recommendations for Borr Drilling and Precision Drilling, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Borr Drilling 0 0 0 0 N/A
Precision Drilling 2 7 4 0 2.15

Precision Drilling has a consensus price target of $1.10, suggesting a potential upside of 75.49%. Given Precision Drilling’s higher probable upside, analysts plainly believe Precision Drilling is more favorable than Borr Drilling.

Insider and Institutional Ownership

30.8% of Borr Drilling shares are owned by institutional investors. Comparatively, 28.2% of Precision Drilling shares are owned by institutional investors. 1.0% of Precision Drilling shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Summary

Precision Drilling beats Borr Drilling on 8 of the 12 factors compared between the two stocks.

Borr Drilling Company Profile

Borr Drilling Limited operates as an offshore drilling contractor to the oil and gas industry worldwide. It owns, contracts, and operates jack-up rigs for operations in shallow-water areas, including the provision of related equipment and work crews to conduct oil and gas drilling and workover operations for exploration and production. The company serves oil and gas exploration and production companies, such as integrated oil companies, state-owned national oil companies, and independent oil and gas companies. As of December 31, 2019, it operated a fleet of 27 jack-up drilling rigs and one semi-submersible rig. The company was formerly known as Magni Drilling Limited and changed its name to Borr Drilling Limited in December 2016.Borr Drilling Limited was founded in 2016 and is based in Hamilton, Bermuda.

Precision Drilling Company Profile

Precision Drilling Corporation, an oilfield services company, 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, sale, and repair of drilling equipment. As of December 31, 2018, this segment operated 236 land drilling rigs, including 117 in Canada; 102 in the United States; 5 in Kuwait; 5 in Mexico; 4 in Saudi Arabia; 2 in the Kurdistan region of Iraq; and 1 in the country of Georgia. The Completion and Production Services segment provides well completion, workover, abandonment, and re-entry preparation services, as well as snubbing units for pressure control services and equipment rentals to oil and natural gas exploration and production companies. It provides service rigs for well completion, workover, abandonment, and re-entry preparation services; snubbing units for pressure control services; camp and catering services; and wastewater treatment units. This segment also engages in the rental of oilfield surface equipment. This segment operated 198 well completion and workover service rigs, and 12 snubbing units in Canada and the United States; approximately 1,700 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, 22 pump houses, and 8 potable water production units in Canada. Precision Drilling Corporation was founded in 1951 and is headquartered in Calgary, Canada.

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