Analyzing Smart Sand (NASDAQ:SND) and Valaris (NYSE:VAL)

Valaris (NYSE:VAL) and Smart Sand (NASDAQ:SND) are both energy companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, risk, earnings, dividends, valuation, profitability and analyst recommendations.

Profitability

This table compares Valaris and Smart Sand’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Valaris	43.95%	9.25%	5.35%
Smart Sand	2.71%	4.41%	3.07%

Insider & Institutional Ownership

96.7% of Valaris shares are held by institutional investors. Comparatively, 35.2% of Smart Sand shares are held by institutional investors. 0.8% of Valaris shares are held by insiders. Comparatively, 33.5% of Smart Sand shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Valaris and Smart Sand”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Valaris	$2.37 billion	2.50	$982.80 million	$13.39	6.37
Smart Sand	$386.99 million	0.56	$1.35 million	$0.26	19.50

Valaris has higher revenue and earnings than Smart Sand. Valaris is trading at a lower price-to-earnings ratio than Smart Sand, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Valaris has a beta of 1.04, indicating that its share price is 4% more volatile than the S&P 500. Comparatively, Smart Sand has a beta of 0.36, indicating that its share price is 64% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Valaris and Smart Sand, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Valaris	1	6	0	0	1.86
Smart Sand	0	0	1	0	3.00

Valaris presently has a consensus target price of $67.80, suggesting a potential downside of 20.56%. Given Valaris’ higher possible upside, equities analysts clearly believe Valaris is more favorable than Smart Sand.

Summary

Valaris beats Smart Sand on 10 of the 14 factors compared between the two stocks.

About Valaris

Valaris Limited, together with its subsidiaries, provides offshore contract drilling services Gulf of Mexico, South America, North Sea, the Middle East, Africa, and the Asia Pacific. The company operates through four segments: Floaters, Jackups, ARO, and Other. It owns an offshore drilling rig fleet, which include drillships, dynamically positioned semisubmersible rigs, moored semisubmersible rig, and jackup rigs. It serves international, government-owned, and independent oil and gas. Valaris Limited was founded in 1975 and is based in Hamilton, Bermuda.

About Smart Sand

Smart Sand, Inc., an integrated frac and industrial sand supply and services company, engages in the excavation, processing, and sale of sands or proppant for use in hydraulic fracturing operations in the oil and gas industry in the United States. It also provides proppant logistics services; and wellsite storage solutions through SmartSystems products and services. The company sells its products primarily to oil and natural gas exploration and production companies, oilfield service companies, and industrial manufacturers. Smart Sand, Inc. was incorporated in 2011 and is headquartered in Spring, Texas.