Ocean Rig UDW (NYSE: HP) and Helmerich & Payne (NYSE:HP) are both mid-cap oils/energy companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, risk, dividends, earnings, analyst recommendations, institutional ownership and profitability.
Insider and Institutional Ownership
86.1% of Ocean Rig UDW shares are owned by institutional investors. Comparatively, 91.7% of Helmerich & Payne shares are owned by institutional investors. 4.1% of Helmerich & Payne shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Helmerich & Payne pays an annual dividend of $2.84 per share and has a dividend yield of 4.3%. Ocean Rig UDW does not pay a dividend. Helmerich & Payne pays out -223.6% of its earnings in the form of a dividend. Helmerich & Payne has increased its dividend for 45 consecutive years.
This table compares Ocean Rig UDW and Helmerich & Payne’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Ocean Rig UDW||-16.88%||6.37%||5.08%|
|Helmerich & Payne||19.70%||-0.37%||-0.26%|
Volatility and Risk
Ocean Rig UDW has a beta of 1.45, meaning that its stock price is 45% more volatile than the S&P 500. Comparatively, Helmerich & Payne has a beta of 1.32, meaning that its stock price is 32% more volatile than the S&P 500.
Earnings and Valuation
This table compares Ocean Rig UDW and Helmerich & Payne’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Ocean Rig UDW||$1.01 billion||2.45||-$5.40 million||N/A||N/A|
|Helmerich & Payne||$1.80 billion||3.99||-$128.21 million||($1.27)||-52.07|
Ocean Rig UDW has higher earnings, but lower revenue than Helmerich & Payne.
This is a breakdown of recent recommendations and price targets for Ocean Rig UDW and Helmerich & Payne, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Ocean Rig UDW||0||1||2||0||2.67|
|Helmerich & Payne||3||9||8||0||2.25|
Ocean Rig UDW presently has a consensus price target of $30.00, suggesting a potential upside of 10.95%. Helmerich & Payne has a consensus price target of $64.19, suggesting a potential downside of 2.94%. Given Ocean Rig UDW’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Ocean Rig UDW is more favorable than Helmerich & Payne.
Helmerich & Payne beats Ocean Rig UDW on 9 of the 15 factors compared between the two stocks.
About Ocean Rig UDW
Ocean Rig UDW Inc., an offshore drilling contractor, provides oilfield services for offshore oil and gas exploration, development, and production drilling worldwide. It specializes in the ultra-deepwater and harsh-environment segment of the offshore drilling industry. The company owns and operates two fifth generation harsh weather ultra-deepwater semisubmersible offshore drilling units under the Leiv Eiriksson and Eirik Raude names; five sixth generation ultra-deepwater drilling units under the Ocean Rig Corcovado, the Ocean Rig Olympia, the Ocean Rig Poseidon, and the Ocean Rig Mykonos names; and four seventh generation drilling units under the Ocean Rig Mylos, the Ocean Rig Skyros, the Ocean Rig Athena, and the Ocean Rig Apollo names. It serves oil companies, integrated oil and gas companies, state-owned national oil companies, and independent oil and gas companies. The company is based in George Town, the Cayman Islands.
About Helmerich & Payne
Helmerich & Payne, Inc. primarily engages in drilling oil and gas wells for exploration and production companies. The company operates through U.S. Land, Offshore, and International Land segments. The U.S. Land segment drills primarily in Colorado, Louisiana, Ohio, Oklahoma, New Mexico, North Dakota, Pennsylvania, Texas, Utah, West Virginia, and Wyoming. The Offshore segment has drilling operations in the Gulf of Mexico. The International Land segment conducts drilling operations in Colombia, Argentina, Bahrain, and the United Arab Emirates. As of September 30, 2017, the company operated a fleet of 350 land rigs in the United States; 38 international land rigs; and 8 offshore platform rigs. The company also provides drilling rigs, equipment, personnel, and related ancillary services on a contract basis to explore for and develop oil and gas from onshore areas and from fixed platforms, tension-leg platforms, and spars in offshore areas. In addition, it owns, develops, and operates commercial real estate properties; and researches and develops rotary steerable technology. Its real estate investments include a shopping center comprising approximately 441,000 leasable square feet; multi-tenant industrial warehouse properties covering approximately one million leasable square feet; and approximately 210 acres of undeveloped real estate located in Tulsa, Oklahoma. Further, the company offers Bit Guidance System, an algorithm-driven system, which considers the total economic consequences of directional drilling decisions and consistently lowers drilling costs through more efficient drilling and increase hydrocarbon production. Helmerich & Payne, Inc. was founded in 1920 and is headquartered in Tulsa, Oklahoma.
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