Pioneer Energy Services (NYSE: PES) and Rowan Companies (NYSE:RDC) are both small-cap oils/energy companies, but which is the better stock? We will compare the two businesses based on the strength of their institutional ownership, earnings, risk, profitability, dividends, analyst recommendations and valuation.

Institutional and Insider Ownership

73.7% of Pioneer Energy Services shares are owned by institutional investors. 6.1% of Pioneer Energy Services shares are owned by insiders. Comparatively, 0.8% of Rowan Companies shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Pioneer Energy Services and Rowan Companies’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Pioneer Energy Services -25.19% -26.46% -9.35%
Rowan Companies -4.76% -0.61% -0.38%

Analyst Recommendations

This is a summary of current ratings and recommmendations for Pioneer Energy Services and Rowan Companies, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Pioneer Energy Services 0 6 3 0 2.33
Rowan Companies 2 11 6 0 2.21

Pioneer Energy Services currently has a consensus target price of $4.61, suggesting a potential upside of 109.42%. Rowan Companies has a consensus target price of $16.43, suggesting a potential upside of 16.68%. Given Pioneer Energy Services’ stronger consensus rating and higher possible upside, equities research analysts clearly believe Pioneer Energy Services is more favorable than Rowan Companies.

Volatility & Risk

Pioneer Energy Services has a beta of 2.94, suggesting that its stock price is 194% more volatile than the S&P 500. Comparatively, Rowan Companies has a beta of 1.9, suggesting that its stock price is 90% more volatile than the S&P 500.

Valuation and Earnings

This table compares Pioneer Energy Services and Rowan Companies’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Pioneer Energy Services $277.08 million 0.62 -$128.39 million ($1.34) -1.64
Rowan Companies $1.84 billion 0.96 $320.60 million ($0.52) -27.08

Rowan Companies has higher revenue and earnings than Pioneer Energy Services. Rowan Companies is trading at a lower price-to-earnings ratio than Pioneer Energy Services, indicating that it is currently the more affordable of the two stocks.

Summary

Rowan Companies beats Pioneer Energy Services on 8 of the 13 factors compared between the two stocks.

Pioneer Energy Services Company Profile

Pioneer Energy Services Corp. provides land-based drilling services and production services to a group of independent oil and gas exploration and production companies in the United States and internationally in Colombia. The Company operates through two segments, which include drilling services segment and production services segment. It also provides two of its services (coiled tubing and wireline services) offshore in the Gulf of Mexico. Its drilling services segment provides contract land drilling services to a group of exploration and production companies through the Company’s four drilling divisions in the United States, and internationally in Colombia. Its production services segment provides a range of services to a group of exploration and production companies, with its operations concentrated in the various United States onshore oil and gas producing regions in the Mid-Continent and Rocky Mountain states and in the Gulf Coast.

Rowan Companies Company Profile

Rowan Companies plc is a provider of offshore contract drilling services to the international oil and gas industry. The Company operates through two segments: deepwater and jack-ups. Its deepwater segment consists of drillship operations. As of December 31, 2016, the Company’s fleet consisted of 29 mobile offshore drilling units, including 25 self-elevating jack-up rigs and four ultra-deepwater drillships. The Company’s fleet operates across the world, including the United States Gulf of Mexico (US GOM), the United Kingdom and Norwegian sectors of the North Sea, the Middle East and Trinidad. As of February 14, 2017, the Company’s drilling fleet consisted of four ultra-deepwater drillships; 19 high-specification cantilever jack-up rigs, and six premium cantilever jack-up rigs. Its jack-ups are capable of drilling wells to maximum depths ranging from 25,000 to 40,000 feet and in maximum water depths ranging from 300 to 550 feet, depending on rig size, location and outfitting.

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