Rowan Companies (RDC) vs. Pioneer Energy Services (PES) Financial Analysis

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

Valuation & Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Rowan Companies $1.84 billion 0.92 $320.60 million ($0.52) -25.71
Pioneer Energy Services $277.08 million 0.63 -$128.39 million ($1.34) -1.68

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.

Risk & Volatility

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

Institutional and Insider Ownership

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

Profitability

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

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

Analyst Recommendations

This is a breakdown of current ratings and target prices for Rowan Companies and Pioneer Energy Services, as reported by MarketBeat.com.

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

Rowan Companies presently has a consensus target price of $16.43, indicating a potential upside of 22.88%. Pioneer Energy Services has a consensus target price of $4.61, indicating a potential upside of 104.76%. Given Pioneer Energy Services’ stronger consensus rating and higher possible upside, analysts plainly believe Pioneer Energy Services is more favorable than Rowan Companies.

Summary

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

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.

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.

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