Comparing Natural Gas Services Group (NYSE:NGS) & Transocean (NYSE:RIG)

Transocean (NYSE:RIG) and Natural Gas Services Group (NYSE:NGS) are both energy companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, dividends, profitability, valuation, institutional ownership, earnings and analyst recommendations.

Profitability

This table compares Transocean and Natural Gas Services Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Transocean	-40.24%	2.60%	1.37%
Natural Gas Services Group	10.81%	8.10%	3.70%

Earnings & Valuation

This table compares Transocean and Natural Gas Services Group”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Transocean	$3.96 billion	1.62	-$2.92 billion	($1.88)	-3.07
Natural Gas Services Group	$172.32 million	2.83	$19.93 million	$1.61	23.44

Natural Gas Services Group has lower revenue, but higher earnings than Transocean. Transocean is trading at a lower price-to-earnings ratio than Natural Gas Services Group, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Transocean and Natural Gas Services Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Transocean	3	4	3	1	2.18
Natural Gas Services Group	0	1	3	0	2.75

Transocean presently has a consensus price target of $6.68, indicating a potential upside of 15.85%. Natural Gas Services Group has a consensus price target of $50.50, indicating a potential upside of 33.81%. Given Natural Gas Services Group’s stronger consensus rating and higher probable upside, analysts plainly believe Natural Gas Services Group is more favorable than Transocean.

Volatility & Risk

Transocean has a beta of 1.32, suggesting that its share price is 32% more volatile than the S&P 500. Comparatively, Natural Gas Services Group has a beta of 0.42, suggesting that its share price is 58% less volatile than the S&P 500.

Institutional and Insider Ownership

67.7% of Transocean shares are owned by institutional investors. Comparatively, 65.6% of Natural Gas Services Group shares are owned by institutional investors. 9.7% of Transocean shares are owned by insiders. Comparatively, 3.1% of Natural Gas Services Group shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Summary

Natural Gas Services Group beats Transocean on 9 of the 14 factors compared between the two stocks.

About Transocean

Transocean Ltd., together with its subsidiaries, provides offshore contract drilling services for oil and gas wells worldwide. It contracts mobile offshore drilling rigs, related equipment, and work crews to drill oil and gas wells. The company operates a fleet of mobile offshore drilling units, consisting of ultra-deepwater floaters and harsh environment floaters. It serves integrated energy companies, government-owned or government-controlled energy companies, and other independent energy companies. The company was founded in 1926 and is based in Steinhausen, Switzerland.

About Natural Gas Services Group

Natural Gas Services Group, Inc. provides natural gas compression equipment and services to the energy industry in the United States. It engineers and fabricates, operates, rents, and maintains natural gas compressors for oil and natural gas production and plant facilities. It also designs, fabricates, and assembles compressor units for rental or sale; and designs, manufactures, and sells a line of reciprocating natural gas compressor frames, cylinders, and parts. In addition, the company offers flare stacks and related ignition and control devices for the onshore and offshore incineration of gas compounds, such as hydrogen sulfide, carbon dioxide, natural gas, and liquefied petroleum gases. Further, it provides aftermarket services for its compressor and flare sales business; and exchange and rebuild program for small horsepower screw compressors. It markets its products to exploration and production companies that utilize compressor units for artificial lift applications; and oil and natural gas exploration and production companies. Natural Gas Services Group, Inc. was incorporated in 1998 and is headquartered in Midland, Texas.