Analyzing Noble (NYSE:NE) and Seadrill (NYSE:SDRL)

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

Analyst Ratings

This is a summary of recent ratings and recommmendations for Noble and Seadrill, as provided by MarketBeat.com.

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

Noble presently has a consensus price target of $41.50, indicating a potential downside of 11.24%. Seadrill has a consensus price target of $51.40, indicating a potential upside of 11.08%. Given Seadrill’s stronger consensus rating and higher possible upside, analysts clearly believe Seadrill is more favorable than Noble.

Insider & Institutional Ownership

68.1% of Noble shares are owned by institutional investors. Comparatively, 95.7% of Seadrill shares are owned by institutional investors. 1.5% of Noble shares are owned by company insiders. Comparatively, 0.2% of Seadrill shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Noble	$3.29 billion	2.27	$216.72 million	$1.35	34.63
Seadrill	$1.44 billion	2.01	-$77.00 million	($1.24)	-37.32

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.

Volatility and Risk

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

Profitability

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

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

Summary

Noble beats Seadrill on 9 of the 15 factors compared between the two stocks.

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.

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.