Critical Analysis: ProFrac (NASDAQ:ACDC) and Seadrill (NYSE:SDRL)

ProFrac (NASDAQ:ACDC) and Seadrill (NYSE:SDRL) are both energy companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, analyst recommendations, risk, institutional ownership, dividends, valuation and earnings.

Insider & Institutional Ownership

12.8% of ProFrac shares are held by institutional investors. Comparatively, 95.7% of Seadrill shares are held by institutional investors. 2.2% of ProFrac shares are held by insiders. Comparatively, 0.5% of Seadrill shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
ProFrac	-22.83%	-45.18%	-13.61%
Seadrill	0.07%	0.64%	0.46%

Earnings and Valuation

This table compares ProFrac and Seadrill”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ProFrac	$1.79 billion	0.46	-$369.00 million	($2.33)	-1.92
Seadrill	$1.44 billion	2.05	-$77.00 million	$0.03	1,567.20

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

Analyst Recommendations

This is a breakdown of current ratings and price targets for ProFrac and Seadrill, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ProFrac	2	2	1	0	1.80
Seadrill	0	2	3	4	3.22

ProFrac presently has a consensus price target of $5.25, indicating a potential upside of 17.45%. Seadrill has a consensus price target of $59.40, indicating a potential upside of 26.34%. Given Seadrill’s stronger consensus rating and higher possible upside, analysts plainly believe Seadrill is more favorable than ProFrac.

Risk & Volatility

ProFrac has a beta of 1.52, indicating that its share price is 52% more volatile than the S&P 500. Comparatively, Seadrill has a beta of 1.25, indicating that its share price is 25% more volatile than the S&P 500.

Summary

Seadrill beats ProFrac on 12 of the 15 factors compared between the two stocks.

About ProFrac

ProFrac Holding Corp. operates as a technology-focused energy services holding company in the United States. It operates through three segments: Stimulation Services, Manufacturing, and Proppant Production. The company offers hydraulic fracturing, well stimulation, in-basin frac sand, and other completion services and complementary products and services to upstream oil and natural gas companies engaged in the exploration and production of unconventional oil and natural gas resources. It also manufactures and sells high horsepower pumps, valves, piping, swivels, large-bore manifold systems, and fluid ends. ProFrac Holding Corp. was founded in 2016 and is headquartered in Willow Park, Texas.

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.