Head-To-Head Comparison: Seadrill (NYSE:SDRL) vs. Noble (NYSE:NE)

Seadrill (NYSE:SDRL) and Noble (NYSE:NE) are both mid-cap energy companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, dividends, profitability, analyst recommendations, valuation, risk and institutional ownership.

Insider & Institutional Ownership

95.7% of Seadrill shares are owned by institutional investors. Comparatively, 68.1% of Noble shares are owned by institutional investors. 0.2% of Seadrill shares are owned by insiders. Comparatively, 1.5% of Noble shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Risk and Volatility

Seadrill has a beta of 1.31, suggesting that its share price is 31% more volatile than the S&P 500. Comparatively, Noble has a beta of 1, suggesting that its share price has a similar volatility profile to the S&P 500.

Profitability

This table compares Seadrill and Noble’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Seadrill	-5.36%	-2.07%	-1.48%
Noble	6.60%	2.34%	1.40%

Valuation & Earnings

This table compares Seadrill and Noble”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Seadrill	$1.44 billion	2.09	-$77.00 million	($1.24)	-38.70
Noble	$3.29 billion	2.44	$216.72 million	$1.35	37.29

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

Dividends

Seadrill pays an annual dividend of $4.00 per share and has a dividend yield of 8.3%. Noble pays an annual dividend of $2.00 per share and has a dividend yield of 4.0%. Seadrill pays out -322.6% of its earnings in the form of a dividend. Noble pays out 148.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Seadrill is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Seadrill and Noble, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Seadrill	2	3	2	1	2.25
Noble	1	10	1	0	2.00

Seadrill currently has a consensus price target of $48.00, indicating a potential upside of 0.03%. Noble has a consensus price target of $39.25, indicating a potential downside of 22.02%. Given Seadrill’s stronger consensus rating and higher possible upside, analysts clearly believe Seadrill is more favorable than Noble.

Summary

Noble beats Seadrill on 9 of the 17 factors compared between the two stocks.

About Seadrill

Seadrill Ltd. engages in the provision of offshore drilling services to the oil and gas industry. It operates through the following segments: Floaters, Jack-up rigs, and Other. The Floaters segment encompasses drilling, completion, and maintenance of offshore exploration and production wells. the Jack-up Rigs segment includes drilling contracts relate to jack-up rigs for operations in harsh and benign environments in shallow water. The Other segment represents management services to third parties and related parties. The company was founded on May 10, 2005 and is headquartered in Hamilton, Bermuda.

About Noble

Noble Corp. Plc engages in the provision offshore drilling services for oil and gas industry. It focuses on a balanced fleet of floating and jackup rigs and the deployment of drilling rigs in oil and gas basins around the world. The company was founded by Lloyd Noble and Art Olson in 1921 and is headquartered in London, the United Kingdom.