Critical Survey: Noble (NYSE:NE) versus Patterson-UTI Energy (NASDAQ:PTEN)

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

Earnings & Valuation

This table compares Patterson-UTI Energy and Noble”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Patterson-UTI Energy	$4.83 billion	0.71	-$93.64 million	($0.25)	-35.88
Noble	$3.29 billion	2.12	$216.72 million	$1.35	32.39

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

Dividends

Patterson-UTI Energy pays an annual dividend of $0.40 per share and has a dividend yield of 4.5%. Noble pays an annual dividend of $2.00 per share and has a dividend yield of 4.6%. Patterson-UTI Energy pays out -160.0% 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.

Insider and Institutional Ownership

97.9% of Patterson-UTI Energy shares are owned by institutional investors. Comparatively, 68.1% of Noble shares are owned by institutional investors. 2.4% of Patterson-UTI Energy shares are owned by company insiders. Comparatively, 1.2% of Noble shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Volatility and Risk

Patterson-UTI Energy has a beta of 0.71, suggesting that its stock price is 29% less volatile than the S&P 500. Comparatively, Noble has a beta of 1.07, suggesting that its stock price is 7% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Patterson-UTI Energy and Noble, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Patterson-UTI Energy	2	6	5	0	2.23
Noble	1	10	1	0	2.00

Patterson-UTI Energy presently has a consensus target price of $8.11, suggesting a potential downside of 9.58%. Noble has a consensus target price of $38.63, suggesting a potential downside of 11.68%. Given Patterson-UTI Energy’s stronger consensus rating and higher probable upside, research analysts clearly believe Patterson-UTI Energy is more favorable than Noble.

Profitability

This table compares Patterson-UTI Energy and Noble’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Patterson-UTI Energy	-1.94%	-1.50%	-0.89%
Noble	6.60%	2.34%	1.40%

Summary

Noble beats Patterson-UTI Energy on 9 of the 16 factors compared between the two stocks.

About Patterson-UTI Energy

Patterson-UTI Energy, Inc., through its subsidiaries, engages in the provision of contract drilling services to oil and natural gas operators in the United States and internationally. It operates through three segments: Drilling Services, Completion Services, and Drilling Products. The Contract Drilling Services segment provides contract and directional drilling services in onshore oil and natural gas basins, as well as engages in the service and re-certification of equipment for drilling contractors, and provision of electrical controls and automation to the energy, marine and mining industries. The Completion Services segment offers services for hydraulic fracturing, wireline and pumping, completion support, and cementing; and involved in the power solutions natural gas fueling, and logistics and storage businesses. The Drilling Products segment manufactures and distributes drill bits for energy and mining markets. It also provides software and services, such as MWD Survey FDIR, a data analytics technology to analyze MWD survey data in real-time and identify the position of a well; HiFi Nav, which enhances FDIR by targeting improved vertical placement of the directional well within the reservoir; HiFi Guidance, utilizes trajectory optimization to determine optimal steering recommendations and placement within the reservoir; and rents oilfield tools. The company was founded in 1978 and is headquartered in Houston, Texas.

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.