Analyzing SLB (NYSE:SLB) & Precision Drilling (NYSE:PDS)

Precision Drilling (NYSE:PDS) and SLB (NYSE:SLB) are both energy companies, but which is the better stock? We will compare the two businesses based on the strength of their dividends, analyst recommendations, earnings, profitability, valuation, institutional ownership and risk.

Institutional and Insider Ownership

48.9% of Precision Drilling shares are held by institutional investors. Comparatively, 82.0% of SLB shares are held by institutional investors. 0.9% of Precision Drilling shares are held by insiders. Comparatively, 0.2% of SLB 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.

Profitability

This table compares Precision Drilling and SLB’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Precision Drilling	-0.24%	3.85%	2.26%
SLB	8.40%	13.77%	6.80%

Earnings and Valuation

This table compares Precision Drilling and SLB”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Precision Drilling	$1.32 billion	0.93	$1.32 million	($0.54)	-181.03
SLB	$35.71 billion	2.17	$3.37 billion	$2.06	25.36

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

Analyst Recommendations

This is a breakdown of current ratings and target prices for Precision Drilling and SLB, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Precision Drilling	1	2	6	0	2.56
SLB	1	3	24	0	2.82

Precision Drilling presently has a consensus target price of $127.60, indicating a potential upside of 30.53%. SLB has a consensus target price of $61.52, indicating a potential upside of 17.74%. Given Precision Drilling’s higher possible upside, analysts plainly believe Precision Drilling is more favorable than SLB.

Risk and Volatility

Precision Drilling has a beta of 0.95, suggesting that its share price is 5% less volatile than the S&P 500. Comparatively, SLB has a beta of 0.83, suggesting that its share price is 17% less volatile than the S&P 500.

Summary

SLB beats Precision Drilling on 11 of the 14 factors compared between the two stocks.

About Precision Drilling

Precision Drilling Corporation, a drilling company, provides onshore drilling, completion, and production services to exploration and production companies in the oil and natural gas and geothermal industries in North America and the Middle East. The company operates through Contract Drilling Services and Completion and Production Services segments. The Contract Drilling Services segment offers onshore well drilling services to exploration and production companies in the geothermal, oil and natural gas industry. This segment offers services include land and turnkey drilling; and procurement and distribution of oilfield supplies, as well as manufacture and repair of drilling and service rig equipment. In addition, it operates land drilling rigs in Canada, the United States, and the Middle East, as well as operates AlphaAutomation, AlphaApps, and AlphaAnalytics data services. The company offers EverGreen suite of environmental solutions comprising EverGreenMonitoring, EverGreenEnergy, and EverGreen Fuel Cell. The Completion and Production Services segment provides service rigs for well completion, workover, abandonment, maintenance, and re-entry preparation services; equipment rentals; and camp and catering services to oil and natural gas exploration and production companies. This segment operates well completion and workover service rigs in Canada and the United States. Precision Drilling Corporation was founded in 1951 and is headquartered in Calgary, Canada.

About SLB

Schlumberger Limited engages in the provision of technology for the energy industry worldwide. The company operates through four divisions: Digital & Integration, Reservoir Performance, Well Construction, and Production Systems. The company provides field development and hydrocarbon production, carbon management, and integration of adjacent energy systems; reservoir interpretation and data processing services for exploration data; and well construction and production improvement services and products. It also offers subsurface geology and fluids evaluation information; open and cased hole services; exploration and production pressure, and flow-rate measurement services; and pressure pumping, well stimulation, and coiled tubing equipment solutions. In addition, the company offers mud logging, directional drilling, measurement-while-drilling, and logging-while-drilling services, as well as engineering support services; supplies drilling fluid systems; designs, manufactures, and markets roller cone and fixed cutter drill bits; bottom-hole-assembly and borehole enlargement technologies; well cementing products and services; well planning, well drilling, engineering, supervision, logistics, procurement, and contracting of third parties, as well as drilling rig management solutions; and drilling equipment and services, as well as land drilling rigs and related services. Further, it provides artificial lift production equipment and optimization services; supplies packers, safety valves, sand control technology, and various intelligent well completions technology and equipment; designs and manufactures valves, chokes, actuators, and surface trees; and OneSubsea, an integrated solutions, products, systems, and services, including wellheads, subsea trees, manifolds and flowline connectors, control systems, connectors, and services. The company was formerly known as Socie´te´ de Prospection E´lectrique. Schlumberger Limited was founded in 1926 and is based in Houston, Texas.