Oceaneering International (NYSE:OII) & Patterson-UTI Energy (NASDAQ:PTEN) Critical Contrast

Patterson-UTI Energy (NASDAQ:PTEN) and Oceaneering International (NYSE:OII) are both mid-cap energy companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, valuation, dividends, institutional ownership, earnings, risk and analyst recommendations.

Analyst Ratings

This is a summary of current recommendations and price targets for Patterson-UTI Energy and Oceaneering International, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Patterson-UTI Energy	0	7	9	0	2.56
Oceaneering International	0	3	1	1	2.60

Patterson-UTI Energy presently has a consensus target price of $13.14, suggesting a potential upside of 16.15%. Oceaneering International has a consensus target price of $45.00, suggesting a potential upside of 4.38%. Given Patterson-UTI Energy’s higher probable upside, analysts plainly believe Patterson-UTI Energy is more favorable than Oceaneering International.

Valuation and Earnings

This table compares Patterson-UTI Energy and Oceaneering International”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Patterson-UTI Energy	$4.83 billion	0.89	-$93.64 million	($0.23)	-49.17
Oceaneering International	$2.87 billion	1.49	$353.76 million	$3.48	12.39

Oceaneering International has lower revenue, but higher earnings than Patterson-UTI Energy. Patterson-UTI Energy is trading at a lower price-to-earnings ratio than Oceaneering International, indicating that it is currently the more affordable of the two stocks.

Dividends

Patterson-UTI Energy pays an annual dividend of $0.40 per share and has a dividend yield of 3.5%. Oceaneering International pays an annual dividend of $0.60 per share and has a dividend yield of 1.4%. Patterson-UTI Energy pays out -173.9% of its earnings in the form of a dividend. Oceaneering International pays out 17.2% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Patterson-UTI Energy is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional and Insider Ownership

97.9% of Patterson-UTI Energy shares are owned by institutional investors. Comparatively, 93.9% of Oceaneering International shares are owned by institutional investors. 2.2% of Patterson-UTI Energy shares are owned by company insiders. Comparatively, 1.3% of Oceaneering International 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.

Profitability

This table compares Patterson-UTI Energy and Oceaneering International’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Patterson-UTI Energy	-1.92%	-1.68%	-0.98%
Oceaneering International	12.19%	18.40%	7.46%

Volatility and Risk

Patterson-UTI Energy has a beta of 0.77, indicating that its share price is 23% less volatile than the S&P 500. Comparatively, Oceaneering International has a beta of 1.25, indicating that its share price is 25% more volatile than the S&P 500.

Summary

Oceaneering International beats Patterson-UTI Energy on 10 of the 17 factors compared between the two stocks.

About Patterson-UTI Energy

Patterson-UTI Energy, Inc., through its subsidiaries, engages in the provision of contract drilling services to oil and natural gas operators in the United States and internationally. It operates through three segments: Drilling Services, Completion Services, and Drilling Products. The Contract Drilling Services segment provides contract and directional drilling services in onshore oil and natural gas basins, as well as engages in the service and re-certification of equipment for drilling contractors, and provision of electrical controls and automation to the energy, marine and mining industries. The Completion Services segment offers services for hydraulic fracturing, wireline and pumping, completion support, and cementing; and involved in the power solutions natural gas fueling, and logistics and storage businesses. The Drilling Products segment manufactures and distributes drill bits for energy and mining markets. It also provides software and services, such as MWD Survey FDIR, a data analytics technology to analyze MWD survey data in real-time and identify the position of a well; HiFi Nav, which enhances FDIR by targeting improved vertical placement of the directional well within the reservoir; HiFi Guidance, utilizes trajectory optimization to determine optimal steering recommendations and placement within the reservoir; and rents oilfield tools. The company was founded in 1978 and is headquartered in Houston, Texas.

About Oceaneering International

Oceaneering International, Inc. provides engineered services and products, and robotic solutions to the offshore energy, defense, aerospace, manufacturing, and entertainment industries worldwide. It operates through Subsea Robotics, Manufactured Products, Offshore Projects Group, Integrity Management & Digital Solutions, and Aerospace and Defense Technologies segments. The company offers remotely operated vehicles (ROVs) for drill support and vessel-based services, including subsea hardware installation, construction, pipeline inspection, survey and facilities inspection, maintenance, and repair; ROV tooling; and survey services, such as hydrographic survey, positioning services, and autonomous underwater vehicles for geoscience. It also provides distribution and connection systems, including production control umbilicals and field development hardware, pipeline connection, and repair systems to the energy industry; and autonomous mobile robotic technology and entertainment systems to various industries. In addition, the company offers subsea installation and intervention, including riserless light well intervention inspection, maintenance, and repair services; installation and workover control systems, and ROV workover control systems; diving services; project management and engineering; and drill pipe riser services and systems, and wellhead load relief solutions. Further, it provides asset integrity management, software and analytical solutions for the bulk cargo maritime industry, and software, digital, and connectivity solutions for the energy industry, as well as government services and products, including engineering and related manufacturing in defense and space exploration activities to the United States' government agencies and their prime contractors. Oceaneering International, Inc. was founded in 1964 and is headquartered in Houston, Texas.