Key Energy Services (NYSE: KEG) and Diamond Offshore Drilling (NYSE:DO) are both oils/energy companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, valuation, dividends, risk, profitability and earnings.
Volatility and Risk
Key Energy Services has a beta of 2.32, indicating that its share price is 132% more volatile than the S&P 500. Comparatively, Diamond Offshore Drilling has a beta of 1.16, indicating that its share price is 16% more volatile than the S&P 500.
This is a summary of current ratings and price targets for Key Energy Services and Diamond Offshore Drilling, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Key Energy Services||0||5||2||0||2.29|
|Diamond Offshore Drilling||11||7||1||0||1.47|
Key Energy Services presently has a consensus price target of $17.33, indicating a potential upside of 4.29%. Diamond Offshore Drilling has a consensus price target of $13.57, indicating a potential downside of 28.04%. Given Key Energy Services’ stronger consensus rating and higher probable upside, equities research analysts clearly believe Key Energy Services is more favorable than Diamond Offshore Drilling.
Earnings and Valuation
This table compares Key Energy Services and Diamond Offshore Drilling’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Key Energy Services||$436.17 million||0.77||-$127.25 million||($6.29)||-2.64|
|Diamond Offshore Drilling||$1.49 billion||1.74||$18.34 million||$0.82||23.00|
Diamond Offshore Drilling has higher revenue and earnings than Key Energy Services. Key Energy Services 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.
This table compares Key Energy Services and Diamond Offshore Drilling’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Key Energy Services||N/A||N/A||N/A|
|Diamond Offshore Drilling||1.00%||1.78%||1.09%|
Insider and Institutional Ownership
50.0% of Key Energy Services shares are held by institutional investors. 0.0% of Diamond Offshore Drilling shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Diamond Offshore Drilling beats Key Energy Services on 8 of the 13 factors compared between the two stocks.
About Key Energy Services
Key Energy Services, Inc. engages in onshore energy production services. It operates through the following segments: U.S. Rig Services, Fluid Management Services, Coiled Tubing Services, Fishing and Rental Services, International, and Functional Support. The U.S. Rig Services segment includes the completion of newly drilled wells, workover and recompletion of existing oil and natural gas wells, well maintenance, and the plugging and abandonment of wells. The Fluid Management Services segment involves in providing transportation and well-site storage services for fluids utilized in connection with drilling, completions, workover, and maintenance activities. The Coiled Tubing Services segment offers use of a continuous metal pipe spooled onto a large reel which is then deployed into oil and natural gas wells. The Fishing and Rental Services segment includes fishing services and rental equipment designed for use in providing onshore and offshore drilling and workover services. The International segment covers operations in Mexico and Russia. The Functional Support segment comprises of unallocated overhead costs associated with sales, safety, and administrative support for each of reporting segments. The company was founded on April 1977 and is headquartered in Houston, TX.
About Diamond Offshore Drilling
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.
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