Comparing Nabors Industries (NYSE:NBR) and SLB (NYSE:SLB)

Nabors Industries (NYSE:NBR) and SLB (NYSE:SLB) are both energy companies, but which is the better stock? We will compare the two companies based on the strength of their dividends, institutional ownership, risk, profitability, valuation, analyst recommendations and earnings.

Valuation and Earnings

This table compares Nabors Industries and SLB”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Nabors Industries	$3.27 billion	0.35	$286.62 million	($4.65)	-15.39
SLB	$35.71 billion	2.05	$3.37 billion	$2.06	24.12

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

Analyst Ratings

This is a breakdown of current recommendations for Nabors Industries and SLB, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Nabors Industries	0	6	2	0	2.25
SLB	1	3	24	0	2.82

Nabors Industries currently has a consensus target price of $104.14, indicating a potential upside of 45.54%. SLB has a consensus target price of $61.52, indicating a potential upside of 23.84%. Given Nabors Industries’ higher possible upside, analysts clearly believe Nabors Industries is more favorable than SLB.

Risk & Volatility

Nabors Industries has a beta of 1.09, meaning that its share price is 9% more volatile than the S&P 500. Comparatively, SLB has a beta of 0.8, meaning that its share price is 20% less volatile than the S&P 500.

Profitability

This table compares Nabors Industries and SLB’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Nabors Industries	-1.17%	-3.98%	-0.85%
SLB	8.40%	13.77%	6.80%

Dividends

Nabors Industries pays an annual dividend of $0.04 per share and has a dividend yield of 0.1%. SLB pays an annual dividend of $1.18 per share and has a dividend yield of 2.4%. Nabors Industries pays out -0.9% of its earnings in the form of a dividend. SLB pays out 57.3% 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. SLB has increased its dividend for 5 consecutive years. SLB is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional and Insider Ownership

81.9% of Nabors Industries shares are held by institutional investors. Comparatively, 82.0% of SLB shares are held by institutional investors. 5.3% of Nabors Industries shares are held by insiders. Comparatively, 0.2% of SLB shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Summary

SLB beats Nabors Industries on 13 of the 17 factors compared between the two stocks.

About Nabors Industries

Nabors Industries Ltd. provides drilling and drilling-related services for land-based and offshore oil and natural gas wells in the United States and internationally. The company operates through four segments: U.S. Drilling, International Drilling, Drilling Solutions, and Rig Technologies. It provides tubular running services, including casing and tubing running, and torque monitoring; managed pressure drilling services; and drilling-bit steering systems and rig instrumentation software. The company also offers drilling systems comprising ROCKit, a directional steering control system; SmartNAV, a collaborative guidance and advisory platform; SmartSLIDE, a directional steering control system; and RigCLOUD, a digital infrastructure to integrate applications to deliver real-time insight into operations across the rig fleet. In addition, it operates a fleet of land-based drilling rigs and marketed platforms rigs; manufactures and sells top drives, catwalks, wrenches, drawworks, and other drilling related equipment, such as robotic systems and downhole tools; and provides aftermarket sales and services for the installed base of its equipment. Nabors Industries Ltd. was founded in 1952 and is based in Hamilton, Bermuda.

About SLB

Schlumberger Limited engages in the provision of technology for the energy industry worldwide. The company operates through four divisions: Digital & Integration, Reservoir Performance, Well Construction, and Production Systems. The company provides field development and hydrocarbon production, carbon management, and integration of adjacent energy systems; reservoir interpretation and data processing services for exploration data; and well construction and production improvement services and products. It also offers subsurface geology and fluids evaluation information; open and cased hole services; exploration and production pressure, and flow-rate measurement services; and pressure pumping, well stimulation, and coiled tubing equipment solutions. In addition, the company offers mud logging, directional drilling, measurement-while-drilling, and logging-while-drilling services, as well as engineering support services; supplies drilling fluid systems; designs, manufactures, and markets roller cone and fixed cutter drill bits; bottom-hole-assembly and borehole enlargement technologies; well cementing products and services; well planning, well drilling, engineering, supervision, logistics, procurement, and contracting of third parties, as well as drilling rig management solutions; and drilling equipment and services, as well as land drilling rigs and related services. Further, it provides artificial lift production equipment and optimization services; supplies packers, safety valves, sand control technology, and various intelligent well completions technology and equipment; designs and manufactures valves, chokes, actuators, and surface trees; and OneSubsea, an integrated solutions, products, systems, and services, including wellheads, subsea trees, manifolds and flowline connectors, control systems, connectors, and services. The company was formerly known as Socie´te´ de Prospection E´lectrique. Schlumberger Limited was founded in 1926 and is based in Houston, Texas.