Critical Review: STEP Energy Services (OTCMKTS:SNVVF) and Transocean (NYSE:RIG)

STEP Energy Services (OTCMKTS:SNVVF) and Transocean (NYSE:RIG) are both energy companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, dividends, analyst recommendations, profitability, earnings, valuation and risk.

Valuation and Earnings

This table compares STEP Energy Services and Transocean”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
STEP Energy Services	N/A	N/A	N/A	N/A	N/A
Transocean	$3.96 billion	1.63	-$2.92 billion	($1.88)	-3.07

STEP Energy Services has higher earnings, but lower revenue than Transocean.

Analyst Recommendations

This is a summary of current ratings for STEP Energy Services and Transocean, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
STEP Energy Services	0	1	0	0	2.00
Transocean	3	4	3	1	2.18

Transocean has a consensus target price of $6.68, suggesting a potential upside of 15.65%. Given Transocean’s stronger consensus rating and higher possible upside, analysts clearly believe Transocean is more favorable than STEP Energy Services.

Institutional & Insider Ownership

67.7% of Transocean shares are held by institutional investors. 9.7% of Transocean shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

This table compares STEP Energy Services and Transocean’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
STEP Energy Services	N/A	N/A	N/A
Transocean	-40.24%	2.60%	1.37%

Summary

Transocean beats STEP Energy Services on 9 of the 10 factors compared between the two stocks.

About STEP Energy Services

STEP Energy Services Ltd., an energy services company, provides integrated coiled tubing, fluid and nitrogen pumping, and hydraulic fracturing to service oil and natural gas industry in Canada and the United States. It also provides fluid pumping services for coiled tubing operations and involved in standalone projects; pipeline commissioning and maintenance services; fracturing logistics services; and laboratory services. In addition, the company offers pipeline, facility maintenance, pipeline pigging, and purging services. STEP Energy Services Ltd. was incorporated in 2011 and is headquartered in Calgary, Canada.

About Transocean

Transocean Ltd., together with its subsidiaries, provides offshore contract drilling services for oil and gas wells worldwide. It contracts mobile offshore drilling rigs, related equipment, and work crews to drill oil and gas wells. The company operates a fleet of mobile offshore drilling units, consisting of ultra-deepwater floaters and harsh environment floaters. It serves integrated energy companies, government-owned or government-controlled energy companies, and other independent energy companies. The company was founded in 1926 and is based in Steinhausen, Switzerland.