Cactus (NYSE:WHD – Get Free Report) and Seadrill (NYSE:SDRL – Get Free Report) are both mid-cap energy companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, profitability, earnings, dividends, risk and institutional ownership.
Profitability
This table compares Cactus and Seadrill’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Cactus | 6.69% | 17.93% | 11.01% |
| Seadrill | 0.07% | 0.64% | 0.46% |
Insider and Institutional Ownership
85.1% of Cactus shares are owned by institutional investors. Comparatively, 95.7% of Seadrill shares are owned by institutional investors. 12.9% of Cactus shares are owned by insiders. Comparatively, 0.5% of Seadrill shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
Risk & Volatility
Cactus has a beta of 1.38, indicating that its share price is 38% more volatile than the S&P 500. Comparatively, Seadrill has a beta of 1.17, indicating that its share price is 17% more volatile than the S&P 500.
Earnings and Valuation
This table compares Cactus and Seadrill”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Cactus | $1.08 billion | 4.61 | $166.01 million | $1.44 | 43.11 |
| Seadrill | $1.44 billion | 2.01 | -$77.00 million | $0.03 | 1,542.73 |
Cactus has higher earnings, but lower revenue than Seadrill. Cactus is trading at a lower price-to-earnings ratio than Seadrill, indicating that it is currently the more affordable of the two stocks.
Analyst Ratings
This is a summary of current recommendations and price targets for Cactus and Seadrill, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Cactus | 0 | 3 | 3 | 0 | 2.50 |
| Seadrill | 0 | 3 | 3 | 2 | 2.88 |
Cactus presently has a consensus target price of $74.75, suggesting a potential upside of 20.42%. Seadrill has a consensus target price of $59.40, suggesting a potential upside of 28.34%. Given Seadrill’s stronger consensus rating and higher possible upside, analysts clearly believe Seadrill is more favorable than Cactus.
Summary
Cactus beats Seadrill on 8 of the 14 factors compared between the two stocks.
About Cactus
Cactus, Inc., together with its subsidiaries, designs, manufactures, sells, and leases pressure control and spoolable pipes in the United States, Australia, Canada, the Middle East, and internationally. It operates through two segments, Pressure Control and Spoolable Technologies. The Pressure Control segment designs, manufactures, sells, and rents a range of wellhead and pressure control equipment under the Cactus Wellhead brand name through service centers. Its products are sold and rented primarily for onshore unconventional oil and gas wells for drilling, completion, and production phases of the wells. This segment also provides field services to install, maintain, and handle the equipment. The Spoolable Technologies segment designs, manufactures, and sells spoolable pipes and associated end fittings under the FlexSteel brand name. Its products are primarily used to transport oil, gas, and other liquids. This segment also provides field services and rental items through service centers and pipe yards, as well as offers equipment and services internationally. In addition, the company offers repair and refurbishment services. Cactus, Inc. was founded in 2011 and is headquartered in Houston, Texas.
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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