Critical Review: Vantage Drilling (OTCMKTS:VTGDF) versus Halliburton (NYSE:HAL)

Halliburton (NYSE:HAL) and Vantage Drilling (OTCMKTS:VTGDF) are both energy companies, but which is the better stock? We will contrast the two businesses based on the strength of their valuation, risk, earnings, institutional ownership, analyst recommendations, profitability and dividends.

Profitability

This table compares Halliburton and Vantage Drilling’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Halliburton	7.16%	18.71%	7.89%
Vantage Drilling	38.80%	-9.97%	-6.50%

Volatility and Risk

Halliburton has a beta of 0.73, suggesting that its stock price is 27% less volatile than the S&P 500. Comparatively, Vantage Drilling has a beta of 0.45, suggesting that its stock price is 55% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations and price targets for Halliburton and Vantage Drilling, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Halliburton	1	6	18	0	2.68
Vantage Drilling	0	0	0	0	0.00

Halliburton currently has a consensus target price of $43.10, suggesting a potential upside of 21.81%. Given Halliburton’s stronger consensus rating and higher probable upside, equities analysts plainly believe Halliburton is more favorable than Vantage Drilling.

Institutional and Insider Ownership

85.2% of Halliburton shares are owned by institutional investors. 0.6% of Halliburton shares are owned by insiders. Comparatively, 7.5% of Vantage Drilling shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Halliburton and Vantage Drilling”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Halliburton	$22.18 billion	1.33	$1.28 billion	$1.91	18.52
Vantage Drilling	$138.25 million	N/A	$40.34 million	$4.40	N/A

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

Summary

Halliburton beats Vantage Drilling on 9 of the 12 factors compared between the two stocks.

About Halliburton

Halliburton Company provides products and services to the energy industry worldwide. It operates through two segments, Completion and Production, and Drilling and Evaluation. The Completion and Production segment offers production enhancement services that include stimulation and sand control services; cementing services, such as well bonding and casing, and casing equipment; and completion tools that offer downhole solutions and services, including well completion products and services, intelligent well completions, and service tools, as well as liner hanger, sand control, and multilateral systems. This segment also provides electrical submersible pumps, as well as artificial lift services; production solutions comprising coiled tubing, hydraulic workover units, downhole tools, and pumping and nitrogen services; pipeline and process services, such as pre-commissioning, commissioning, maintenance, and decommissioning; and specialty chemicals and services. The Drilling and Evaluation segment offers drilling fluid systems, performance additives, completion fluids, solids control, specialized testing equipment, and waste management services; drilling systems and services; wireline and perforating services consists of open-hole logging, and cased-hole and slickline; and drill bits and services comprising roller cone rock bits, fixed cutter bits, hole enlargement, and related downhole tools and services, as well as coring equipment and services. This segment also provides cloud based digital services and artificial intelligence solutions on an open architecture for subsurface insights, integrated well construction, and reservoir and production management; testing and subsea services, such as acquisition and analysis of reservoir information and optimization solutions; and project management and integrated asset management services. Halliburton Company was founded in 1919 and is based in Houston, Texas.

About Vantage Drilling

Vantage Drilling Company is in liquidation. Previously, the company was engaged in the provision of offshore contract drilling services for multinational oil and natural gas companies, government owned oil and natural gas companies, and independent oil and natural gas producers in the United States and internationally. Vantage Drilling Company was founded in 2007 and is based in Houston, Texas.