Analyzing North Atlantic Drilling (NADL) and Noble Corporation (NE)

North Atlantic Drilling (NYSE: NADL) and Noble Corporation (NYSE:NE) are both small-cap oils/energy companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, profitability, earnings, risk, analyst recommendations, institutional ownership and dividends.

Earnings and Valuation

This table compares North Atlantic Drilling and Noble Corporation’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
North Atlantic Drilling $343.90 million 0.08 $157.90 million ($7.96) -0.14
Noble Corporation $1.40 billion 0.72 $639.70 million ($7.21) -0.57

Noble Corporation has higher revenue and earnings than North Atlantic Drilling. Noble Corporation is trading at a lower price-to-earnings ratio than North Atlantic Drilling, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of current ratings and price targets for North Atlantic Drilling and Noble Corporation, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
North Atlantic Drilling 0 0 0 0 N/A
Noble Corporation 6 17 4 0 1.93

Noble Corporation has a consensus price target of $5.80, indicating a potential upside of 40.32%. Given Noble Corporation’s higher possible upside, analysts plainly believe Noble Corporation is more favorable than North Atlantic Drilling.

Institutional and Insider Ownership

5.7% of North Atlantic Drilling shares are owned by institutional investors. Comparatively, 95.6% of Noble Corporation shares are owned by institutional investors. 1.6% of Noble Corporation shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares North Atlantic Drilling and Noble Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
North Atlantic Drilling -54.37% -55.80% -6.69%
Noble Corporation -122.04% -3.19% -1.83%

Risk and Volatility

North Atlantic Drilling has a beta of 3, meaning that its share price is 200% more volatile than the S&P 500. Comparatively, Noble Corporation has a beta of 2.28, meaning that its share price is 128% more volatile than the S&P 500.

Summary

Noble Corporation beats North Atlantic Drilling on 10 of the 12 factors compared between the two stocks.

About North Atlantic Drilling

North Atlantic Drilling Ltd. operates as an offshore drilling contractor in the North Atlantic region. The company provides harsh environment offshore drilling services to the oil and gas industry primarily in Norway, the United Kingdom, and the Russian Federation. As of December 31, 2016, it owned seven offshore drilling rigs, including three semi-submersibles, one ultra-deep water drillship, and three jack-up rigs. The company was founded in 2011 and is headquartered in Hamilton, Bermuda. North Atlantic Drilling Ltd. is a subsidiary of Seadrill Limited.

About Noble Corporation

Noble Corporation is an offshore drilling contractor for the oil and gas industry. The Company performs contract drilling services with its fleet of 79 mobile offshore drilling units and one floating production storage and offloading unit (NYSE:NE) located globally.

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