Rowan Companies PLC (NYSE:RDC) and Transocean Partners (RIGP) Financial Survey

Rowan Companies PLC (NYSE: RDC) and Transocean Partners (NYSE:RIGP) are both oils/energy companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, valuation, institutional ownership, earnings, analyst recommendations, risk and profitabiliy.

Profitability

This table compares Rowan Companies PLC and Transocean Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Rowan Companies PLC -2.62% 0.51% 0.31%
Transocean Partners 53.12% 13.03% 15.28%

Institutional & Insider Ownership

29.0% of Transocean Partners shares are held by institutional investors. 0.8% of Rowan Companies PLC shares are held by company insiders. Comparatively, 0.1% of Transocean Partners shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Risk & Volatility

Rowan Companies PLC has a beta of 1.77, meaning that its stock price is 77% more volatile than the S&P 500. Comparatively, Transocean Partners has a beta of 1.68, meaning that its stock price is 68% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Rowan Companies PLC and Transocean Partners, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Rowan Companies PLC 3 13 6 0 2.14
Transocean Partners 0 0 1 0 3.00

Rowan Companies PLC presently has a consensus target price of $16.37, suggesting a potential upside of 49.22%. Transocean Partners has a consensus target price of $18.00, suggesting a potential upside of 0.95%. Given Rowan Companies PLC’s higher probable upside, research analysts plainly believe Rowan Companies PLC is more favorable than Transocean Partners.

Dividends

Transocean Partners pays an annual dividend of $1.45 per share and has a dividend yield of 8.1%. Rowan Companies PLC does not pay a dividend. Transocean Partners pays out 70.0% of its earnings in the form of a dividend. Rowan Companies PLC has increased its dividend for 2 consecutive years and Transocean Partners has increased its dividend for 2 consecutive years.

Earnings & Valuation

This table compares Rowan Companies PLC and Transocean Partners’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Rowan Companies PLC $1.43 billion 0.97 $627.20 million ($0.31) -35.39
Transocean Partners N/A N/A N/A $2.07 8.61

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

Summary

Transocean Partners beats Rowan Companies PLC on 7 of the 13 factors compared between the two stocks.

About Rowan Companies PLC

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.

About Transocean Partners

Transocean Partners LLC a limited liability company. The Company is formed by Transocean Partners Holdings Limited and a subsidiary of Transocean Ltd. (Transocean), to own, operate and acquire advanced offshore drilling rigs. The Company’s assets consist of over 50% ownership interest in each of the entities that owns and operates over three ultra-deepwater drilling rigs that are operating in the U.S. Gulf of Mexico, which include Discoverer Clear Leader, Discoverer Inspiration and Development Driller III. The Company owns or has partial ownership interests in, and operated over 60 mobile offshore drilling units, including approximately 30 ultra-deepwater floaters, over seven harsh environment floaters, approximately five deepwater floaters, over 10 midwater floaters and approximately 10 high-specification jackups. Transocean also has approximately six ultra-deepwater drillships and over five high-specification jackups under construction.

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