Key Energy Services (NYSE: KEG) and Transocean (NYSE:RIG) are both oils/energy companies, but which is the better stock? We will compare the two businesses based on the strength of their valuation, dividends, risk, profitability, analyst recommendations, earnings and institutional ownership.
Institutional & Insider Ownership
56.1% of Key Energy Services shares are owned by institutional investors. Comparatively, 72.8% of Transocean shares are owned by institutional investors. 4.0% of Key Energy Services shares are owned by insiders. Comparatively, 0.3% of Transocean shares are owned 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.
This is a summary of recent recommendations for Key Energy Services and Transocean, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Key Energy Services||0||4||2||0||2.33|
Key Energy Services presently has a consensus target price of $15.50, suggesting a potential downside of 3.25%. Transocean has a consensus target price of $11.74, suggesting a potential downside of 7.57%. Given Key Energy Services’ stronger consensus rating and higher probable upside, equities analysts clearly believe Key Energy Services is more favorable than Transocean.
Earnings & Valuation
This table compares Key Energy Services and Transocean’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Key Energy Services||$436.17 million||0.74||-$127.25 million||($6.29)||-2.55|
|Transocean||$2.97 billion||1.97||-$3.13 billion||($0.06)||-211.67|
Key Energy Services has higher earnings, but lower revenue than Transocean. Transocean is trading at a lower price-to-earnings ratio than Key Energy Services, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
Key Energy Services has a beta of 2.4, indicating that its stock price is 140% more volatile than the S&P 500. Comparatively, Transocean has a beta of 1.48, indicating that its stock price is 48% more volatile than the S&P 500.
This table compares Key Energy Services and Transocean’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Key Energy Services||N/A||N/A||N/A|
Key Energy Services beats Transocean on 9 of the 14 factors compared between the two stocks.
About Key Energy Services
Key Energy Services, Inc. operates as an onshore rig-based well servicing contractor in the United States. The company's U.S. Rig Services segment is involved in the completion of newly drilled wells; workover and recompletion of existing oil and natural gas wells; well maintenance activities; and plugging and abandonment of wells at the end of their lives, as well as provision of specialty drilling services to oil and natural gas producers. Its Fluid Management Services segment offers transportation and well-site storage services for fluids utilized in drilling, completions, workover, and maintenance activities; and disposal services for fluids produced subsequent to well completion. It also operates a fleet of hot oilers used to clear soluble restrictions in a wellbore. The company's Coiled Tubing Services segment offers services for wellbore clean-outs, nitrogen jet lifts, through-tubing fishing, and formation stimulations; mills temporary isolation plugs that separate frac zones; and other pre- and post-hydraulic fracturing well preparation services. Its Fishing and Rental Services segment provides fishing services that involve recovering lost or stuck equipment in the wellbore utilizing fishing tools; and rents drill pipes, tubulars, handling tools, pressure-control equipment, pumps, power swivels, reversing units, and foam air units, as well as frac stack equipment used to support hydraulic fracturing operations and the associated flowback of frac fluids, proppants, oil, and natural gas. The company was formerly known as Key Energy Group, Inc. and changed its name to Key Energy Services, Inc. in December 1998. Key Energy Services, Inc. was founded in 1977 and is based in Houston, Texas.
Transocean Ltd., together with its subsidiaries, provides offshore contract drilling services for oil and gas wells worldwide. The company primarily offers deepwater and harsh environment drilling services. As of February 20, 2018, it owned or had partial ownership interests in, and operated 47 mobile offshore drilling units that consist of 27 ultra-deepwater floaters, 12 harsh environment floaters, 2 deepwater floaters, 6 midwater floaters, and 2 high-specification jackups. The company serves government-controlled oil companies and independent oil companies. Transocean Ltd. was founded in 1953 and is based in Steinhausen, Switzerland.
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