Borr Drilling (NYSE:BORR – Get Free Report) and Seadrill (NYSE:SDRL – Get Free Report) are both small-cap energy companies, but which is the superior business? We will contrast the two businesses based on the strength of their valuation, profitability, dividends, risk, institutional ownership, earnings and analyst recommendations.
Risk and Volatility
Borr Drilling has a beta of 1.84, indicating that its share price is 84% more volatile than the S&P 500. Comparatively, Seadrill has a beta of 1.55, indicating that its share price is 55% more volatile than the S&P 500.
Analyst Ratings
This is a breakdown of current ratings and target prices for Borr Drilling and Seadrill, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Borr Drilling | 0 | 0 | 1 | 0 | 3.00 |
| Seadrill | 0 | 0 | 4 | 0 | 3.00 |
Insider and Institutional Ownership
83.1% of Borr Drilling shares are owned by institutional investors. Comparatively, 95.7% of Seadrill shares are owned by institutional investors. 7.9% of Borr Drilling shares are owned by company insiders. Comparatively, 0.2% of Seadrill shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
Profitability
This table compares Borr Drilling and Seadrill’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Borr Drilling | 8.12% | 8.27% | 2.51% |
| Seadrill | 27.79% | 7.24% | 5.12% |
Earnings & Valuation
This table compares Borr Drilling and Seadrill”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Borr Drilling | $993.20 million | 0.50 | $22.10 million | $0.19 | 10.87 |
| Seadrill | $1.35 billion | 1.25 | $300.00 million | $5.29 | 5.12 |
Seadrill has higher revenue and earnings than Borr Drilling. Seadrill is trading at a lower price-to-earnings ratio than Borr Drilling, indicating that it is currently the more affordable of the two stocks.
Dividends
Borr Drilling pays an annual dividend of $0.10 per share and has a dividend yield of 4.8%. Seadrill pays an annual dividend of $4.00 per share and has a dividend yield of 14.8%. Borr Drilling pays out 52.6% of its earnings in the form of a dividend. Seadrill pays out 75.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Summary
Seadrill beats Borr Drilling on 9 of the 15 factors compared between the two stocks.
About Borr Drilling
Borr Drilling Limited operates as an offshore shallow-water drilling contractor to the oil and gas industry worldwide. The company owns, contracts, and operates jack-up drilling rigs for operations in shallow-water areas, including the provision of related equipment and work crews to conduct oil and gas drilling and workover operations for exploration and production. It serves oil and gas exploration and production companies, such as integrated oil companies, state-owned national oil companies, and independent oil and gas companies. The company was formerly known as Magni Drilling Limited and changed its name to Borr Drilling Limited in December 2016. Borr Drilling Limited was incorporated in 2016 and is based in Hamilton, Bermuda.
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.
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