Precision Drilling Corporation (NYSE: PDS) and Nabors Industries (NYSE:NBR) are both oils/energy companies, but which is the superior stock? We will contrast the two companies based on the strength of their risk, analyst recommendations, valuation, profitabiliy, dividends, institutional ownership and earnings.
Institutional and Insider Ownership
63.2% of Precision Drilling Corporation shares are owned by institutional investors. Comparatively, 98.7% of Nabors Industries shares are owned by institutional investors. 1.0% of Precision Drilling Corporation shares are owned by company insiders. Comparatively, 4.1% of Nabors Industries 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.
Earnings & Valuation
This table compares Precision Drilling Corporation and Nabors Industries’ revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | EBITDA | Earnings Per Share | Price/Earnings Ratio | |
| Precision Drilling Corporation | $790.22 million | 1.08 | $170.01 million | ($0.35) | -8.31 |
| Nabors Industries | $2.19 billion | 0.97 | $562.51 million | ($2.74) | -2.72 |
Nabors Industries has higher revenue and earnings than Precision Drilling Corporation. Precision Drilling Corporation is trading at a lower price-to-earnings ratio than Nabors Industries, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Precision Drilling Corporation and Nabors Industries’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Precision Drilling Corporation | -12.38% | -7.00% | -3.16% |
| Nabors Industries | -36.49% | -11.57% | -4.77% |
Analyst Recommendations
This is a breakdown of recent ratings and recommmendations for Precision Drilling Corporation and Nabors Industries, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Precision Drilling Corporation | 0 | 6 | 9 | 1 | 2.69 |
| Nabors Industries | 0 | 9 | 16 | 0 | 2.64 |
Precision Drilling Corporation presently has a consensus price target of $6.28, suggesting a potential upside of 115.81%. Nabors Industries has a consensus price target of $14.98, suggesting a potential upside of 100.74%. Given Precision Drilling Corporation’s stronger consensus rating and higher possible upside, analysts plainly believe Precision Drilling Corporation is more favorable than Nabors Industries.
Dividends
Nabors Industries pays an annual dividend of $0.24 per share and has a dividend yield of 3.2%. Precision Drilling Corporation does not pay a dividend. Nabors Industries pays out -8.8% of its earnings in the form of a dividend. Nabors Industries has raised its dividend for 3 consecutive years.
Volatility & Risk
Precision Drilling Corporation has a beta of 1.73, suggesting that its stock price is 73% more volatile than the S&P 500. Comparatively, Nabors Industries has a beta of 1.56, suggesting that its stock price is 56% more volatile than the S&P 500.
Summary
Precision Drilling Corporation beats Nabors Industries on 9 of the 17 factors compared between the two stocks.
About Precision Drilling Corporation
Precision Drilling Corporation (Precision) is an oilfield services company. The Company provides onshore drilling and completion and production services to exploration and production companies in the oil and natural gas industry. The Company operates through two segments: Contract Drilling Services, and Completion and Production Services. The Contract Drilling Services segment operates its rigs in Canada, the United States and internationally. The Completion and Production Services segment provides completion and workover services and ancillary services to oil and natural gas exploration and production companies in Canada and the United States. As of December 31, 2016, the Contract Drilling Services segment consisted of 255 land drilling rigs, including 135 in Canada, 103 in the United States, five in Mexico, four in Saudi Arabia, five in Kuwait, two in the Kurdistan region of Iraq and one in the country of Georgia.
About Nabors Industries
Nabors Industries Ltd. owns and operates a land-based drilling rig fleet. The Company is a provider of offshore platform drilling rigs in the United States and multiple international markets. The Company conducts its Drilling & Rig Services business through four segments: U.S. Drilling, Canada Drilling, International Drilling and Rig Services. The Company provides wellbore placement services, drilling software and performance tools, drilling equipment and various technologies throughout the oil and gas markets. The Company’s Drilling & Rig Services business comprises land-based and offshore drilling rig operations and other rig services, consisting of equipment manufacturing, rig instrumentation and optimization software. The Company is a provider of directional drilling and measurement while drilling (MWD) systems and services. The Company also provides drilling technology and equipment, and well-site services.
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