Transocean (NYSE: RIG) and Transocean Partners (NYSE:RIGP) are both oils/energy companies, but which is the superior stock? We will compare the two businesses based on the strength of their dividends, valuation, institutional ownership, analyst recommendations, profitability, risk and earnings.
Valuation and Earnings
This table compares Transocean and Transocean Partners’ revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Transocean||$3.42 billion||0.86||$1.83 billion||($2.87)||-2.61|
Transocean has higher revenue and earnings than Transocean Partners. Transocean is trading at a lower price-to-earnings ratio than Transocean Partners, indicating that it is currently the more affordable of the two stocks.
This table compares Transocean and Transocean Partners’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a breakdown of current recommendations and price targets for Transocean and Transocean Partners, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Transocean currently has a consensus price target of $12.47, suggesting a potential upside of 66.76%. Transocean Partners has a consensus price target of $18.00, suggesting a potential upside of 0.95%. Given Transocean’s higher possible upside, analysts plainly believe Transocean is more favorable than Transocean Partners.
Insider & Institutional Ownership
69.3% of Transocean shares are held by institutional investors. Comparatively, 29.0% of Transocean Partners shares are held by institutional investors. 0.3% of Transocean shares are held by insiders. Comparatively, 0.1% of Transocean Partners shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Risk and Volatility
Transocean has a beta of 1.68, suggesting that its share price is 68% more volatile than the S&P 500. Comparatively, Transocean Partners has a beta of 1.68, suggesting that its share price is 68% more volatile than the S&P 500.
Transocean Partners pays an annual dividend of $1.45 per share and has a dividend yield of 8.1%. Transocean does not pay a dividend. Transocean Partners pays out 70.0% of its earnings in the form of a dividend. Transocean has raised its dividend for 2 consecutive years and Transocean Partners has raised its dividend for 4 consecutive years.
Transocean Partners beats Transocean on 7 of the 13 factors compared between the two stocks.
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.
Transocean Partners Company Profile
Transocean Partners LLC a limited liability company. The Company is formed by Transocean Partners Holdings Limited and a subsidiary of Transocean Ltd. (Transocean), to own, operate and acquire advanced offshore drilling rigs. The Company’s assets consist of over 50% ownership interest in each of the entities that owns and operates over three ultra-deepwater drilling rigs that are operating in the U.S. Gulf of Mexico, which include Discoverer Clear Leader, Discoverer Inspiration and Development Driller III. The Company owns or has partial ownership interests in, and operated over 60 mobile offshore drilling units, including approximately 30 ultra-deepwater floaters, over seven harsh environment floaters, approximately five deepwater floaters, over 10 midwater floaters and approximately 10 high-specification jackups. Transocean also has approximately six ultra-deepwater drillships and over five high-specification jackups under construction.
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