Comparing Transocean (NYSE:RIG) & Smart Sand (NASDAQ:SND)

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

Institutional and Insider Ownership

35.2% of Smart Sand shares are owned by institutional investors. Comparatively, 67.7% of Transocean shares are owned by institutional investors. 33.5% of Smart Sand shares are owned by insiders. Comparatively, 9.7% of Transocean shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Smart Sand	2.71%	4.41%	3.07%
Transocean	7.25%	1.84%	1.00%

Risk & Volatility

Smart Sand has a beta of 0.43, indicating that its share price is 57% less volatile than the S&P 500. Comparatively, Transocean has a beta of 1.44, indicating that its share price is 44% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Smart Sand and Transocean, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Smart Sand	0	0	1	0	3.00
Transocean	3	4	3	2	2.33

Transocean has a consensus price target of $6.68, indicating a potential upside of 31.08%. Given Transocean’s higher probable upside, analysts clearly believe Transocean is more favorable than Smart Sand.

Valuation and Earnings

This table compares Smart Sand and Transocean”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Smart Sand	$330.15 million	0.50	$1.35 million	$0.26	15.04
Transocean	$3.96 billion	1.44	-$2.92 billion	$0.14	36.39

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

Summary

Transocean beats Smart Sand on 9 of the 15 factors compared between the two stocks.

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.

About Transocean

Transocean Ltd., together with its subsidiaries, provides offshore contract drilling services for oil and gas wells worldwide. It contracts mobile offshore drilling rigs, related equipment, and work crews to drill oil and gas wells. The company operates a fleet of mobile offshore drilling units, consisting of ultra-deepwater floaters and harsh environment floaters. It serves integrated energy companies, government-owned or government-controlled energy companies, and other independent energy companies. The company was founded in 1926 and is based in Steinhausen, Switzerland.