Analyzing Enerflex (NYSE:EFXT) and Seadrill (NYSE:SDRL)

Enerflex (NYSE:EFXT) and Seadrill (NYSE:SDRL) are both mid-cap energy companies, but which is the better investment? We will contrast the two businesses based on the strength of their analyst recommendations, dividends, earnings, profitability, institutional ownership, valuation and risk.

Dividends

Enerflex pays an annual dividend of $0.12 per share and has a dividend yield of 0.5%. Seadrill pays an annual dividend of $4.00 per share and has a dividend yield of 7.9%. Enerflex pays out 27.9% of its earnings in the form of a dividend. Seadrill pays out 13,333.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Enerflex has raised its dividend for 1 consecutive years.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Enerflex and Seadrill, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Enerflex	1	1	6	1	2.78
Seadrill	0	3	3	3	3.00

Enerflex presently has a consensus target price of $38.67, suggesting a potential upside of 61.25%. Seadrill has a consensus target price of $59.40, suggesting a potential upside of 16.92%. Given Enerflex’s higher probable upside, equities analysts clearly believe Enerflex is more favorable than Seadrill.

Profitability

This table compares Enerflex and Seadrill’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Enerflex	N/A	N/A	N/A
Seadrill	N/A	N/A	N/A

Insider and Institutional Ownership

46.5% of Enerflex shares are held by institutional investors. Comparatively, 95.7% of Seadrill shares are held by institutional investors. 0.5% of Seadrill shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Risk & Volatility

Enerflex has a beta of 1.8, suggesting that its stock price is 80% more volatile than the S&P 500. Comparatively, Seadrill has a beta of 1.25, suggesting that its stock price is 25% more volatile than the S&P 500.

Valuation & Earnings

This table compares Enerflex 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
Enerflex	$2.57 billion	1.14	$52.50 million	$0.43	55.77
Seadrill	$1.53 billion	2.07	$1.88 million	$0.03	1,693.40

Enerflex has higher revenue and earnings than Seadrill. Enerflex is trading at a lower price-to-earnings ratio than Seadrill, indicating that it is currently the more affordable of the two stocks.

Summary

Enerflex beats Seadrill on 8 of the 15 factors compared between the two stocks.

About Enerflex

Enerflex Ltd. offers energy infrastructure and energy transition solutions to natural gas markets in North America, Latin America, and the Eastern Hemisphere. The company provides natural gas compression infrastructure, processing, and treated water infrastructure under contract to oil and natural gas customers; power generation rental solutions; custom and standard compression packages for reciprocating and screw compressor applications; re-engineering, re-configuration, and re-packaging of compressors for various field applications; integrated turnkey power generation, gas compression, processing facilities, natural gas compression, processing, and electric power solutions; after-market mechanical services and parts distribution, as well as maintenance solutions to the oil and natural gas industry, operations, and overhaul services; and equipment supply, parts supply, and general asset management. It also designs, engineers, manufactures, constructs, and installs modular natural gas processing equipment, low-carbon solutions, cryogenic systems, electric power solutions, and treated water solutions; and engages in the engineering, design, procurement, project management, and construction services for compression, process, treated water, and power generation equipment, as well as after-market service, parts, and operations and maintenance services for gas compression, processing, and treated water facilities in the region. The company was formerly known as Enerflex Systems Income Fund and changed its name to Enerflex Ltd. in January 2010. Enerflex Ltd. was founded in 1980 and is headquartered in Calgary, Canada.

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.