Transocean Partners (NYSE: RIGP) and Helmerich & Payne (NYSE:HP) are both energy companies, but which is the superior stock? We will compare the two companies based on the strength of their risk, earnings, analyst recommendations, institutional ownership, valuation, dividends and profitability.
Institutional & Insider Ownership
29.0% of Transocean Partners shares are held by institutional investors. 0.1% of Transocean Partners shares are held by insiders. Comparatively, 4.2% of Helmerich & Payne shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Transocean Partners pays an annual dividend of $1.45 per share and has a dividend yield of 8.1%. Helmerich & Payne pays an annual dividend of $2.80 per share and has a dividend yield of 4.0%. Transocean Partners pays out 60.2% of its earnings in the form of a dividend. Helmerich & Payne pays out -235.3% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Transocean Partners has raised its dividend for 45 consecutive years and Helmerich & Payne has raised its dividend for 3 consecutive years. Transocean Partners is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This table compares Transocean Partners and Helmerich & Payne’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Helmerich & Payne||-7.16%||-2.96%||-1.95%|
Valuation and Earnings
This table compares Transocean Partners and Helmerich & Payne’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Helmerich & Payne||$1.80 billion||4.22||-$128.21 million||($1.19)||-58.86|
Transocean Partners has higher earnings, but lower revenue than Helmerich & Payne. Helmerich & Payne is trading at a lower price-to-earnings ratio than Transocean Partners, indicating that it is currently the more affordable of the two stocks.
This is a summary of current ratings and price targets for Transocean Partners and Helmerich & Payne, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Helmerich & Payne||6||15||3||0||1.88|
Helmerich & Payne has a consensus target price of $54.00, indicating a potential downside of 22.90%. Given Helmerich & Payne’s higher probable upside, analysts clearly believe Helmerich & Payne is more favorable than Transocean Partners.
Transocean Partners beats Helmerich & Payne on 8 of the 13 factors compared between the two stocks.
Transocean Partners Company Profile
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.
Helmerich & Payne Company Profile
Helmerich & Payne, Inc. is engaged in contract drilling of oil and gas wells for others. The Company operates in the contract drilling industry. The Company’s contract drilling business consists of three segments: U.S. Land, Offshore and International Land. The Company is also engaged in the ownership, development and operation of commercial real estate and the research and development of rotary steerable technology. Its real estate investments are located within Tulsa, Oklahoma, and include a shopping center containing approximately 441,000 leasable square feet, multi-tenant industrial warehouse properties containing approximately one million leasable square feet and approximately 210 acres of undeveloped real estate. The Company provides drilling rigs, equipment, personnel and camps on a contract basis. The Company’s subsidiaries include Helmerich & Payne International Drilling Co. and Helmerich & Payne de Venezuela, C.A.
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