Reviewing Transocean (RIG) and The Competition

Transocean (NYSE: RIG) is one of 18 public companies in the “Oil & Gas Drilling” industry, but how does it weigh in compared to its rivals? We will compare Transocean to related companies based on the strength of its institutional ownership, dividends, risk, analyst recommendations, valuation, profitability and earnings.

Institutional & Insider Ownership

67.8% of Transocean shares are owned by institutional investors. Comparatively, 74.9% of shares of all “Oil & Gas Drilling” companies are owned by institutional investors. 0.3% of Transocean shares are owned by company insiders. Comparatively, 2.2% of shares of all “Oil & Gas Drilling” companies are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

This table compares Transocean and its rivals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Transocean -33.52% 2.20% 1.30%
Transocean Competitors -18.41% -8.37% -2.62%

Valuation and Earnings

This table compares Transocean and its rivals revenue, earnings per share (EPS) and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
Transocean $3.42 billion $1.83 billion -3.54
Transocean Competitors $1.42 billion $540.19 million -6.65

Transocean has higher revenue and earnings than its rivals. Transocean is trading at a higher price-to-earnings ratio than its rivals, indicating that it is currently more expensive than other companies in its industry.

Analyst Ratings

This is a summary of recent recommendations and price targets for Transocean and its rivals, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Transocean 9 12 13 0 2.12
Transocean Competitors 493 1519 1234 57 2.26

Transocean currently has a consensus price target of $12.24, suggesting a potential upside of 20.40%. As a group, “Oil & Gas Drilling” companies have a potential upside of 27.03%. Given Transocean’s rivals stronger consensus rating and higher probable upside, analysts clearly believe Transocean has less favorable growth aspects than its rivals.

Risk and Volatility

Transocean has a beta of 1.76, meaning that its share price is 76% more volatile than the S&P 500. Comparatively, Transocean’s rivals have a beta of 1.89, meaning that their average share price is 89% more volatile than the S&P 500.

Summary

Transocean rivals beat Transocean on 7 of the 13 factors compared.

Transocean Company Profile

Transocean Ltd. is an international provider of offshore contract drilling services for oil and gas wells. The Company’s primary business is to contract its drilling rigs, related equipment and work crews on a dayrate basis to drill oil and gas wells. As of February 9, 2017, it owned or had partial ownership interests in and operated 56 mobile offshore drilling units. As of February 9, 2017, its fleet consisted of 30 floaters, seven harsh environment floaters, three deepwater floaters, six midwater floaters and 10 high-specification jackups. As February 9, 2017, it also had four ultra-deepwater drillships and five high-specification jackups under construction or under contract to be constructed. Its contract drilling services operations are spread across oil and gas exploration and development areas throughout the world. The Company’s drilling fleet can be characterized as floaters, including drillships and semisubmersibles, and jackups.

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