Reviewing Patterson-UTI Energy (NASDAQ:PTEN) and Ranger Energy Services (NYSE:RNGR)

Ranger Energy Services (NYSE:RNGR) and Patterson-UTI Energy (NASDAQ:PTEN) are both energy companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, dividends, profitability, earnings, analyst recommendations, valuation and institutional ownership.

Profitability

This table compares Ranger Energy Services and Patterson-UTI Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ranger Energy Services	2.36%	4.87%	3.33%
Patterson-UTI Energy	-0.52%	-0.58%	-0.34%

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Ranger Energy Services and Patterson-UTI Energy, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ranger Energy Services	0	2	1	0	2.33
Patterson-UTI Energy	0	6	9	0	2.60

Ranger Energy Services presently has a consensus price target of $20.00, suggesting a potential upside of 59.81%. Patterson-UTI Energy has a consensus price target of $14.09, suggesting a potential upside of 42.05%. Given Ranger Energy Services’ higher possible upside, equities analysts plainly believe Ranger Energy Services is more favorable than Patterson-UTI Energy.

Earnings & Valuation

This table compares Ranger Energy Services and Patterson-UTI Energy”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ranger Energy Services	$546.90 million	0.54	$12.30 million	$0.60	20.86
Patterson-UTI Energy	$4.83 billion	0.78	-$93.64 million	($0.06)	-165.33

Ranger Energy Services has higher earnings, but lower revenue than Patterson-UTI Energy. Patterson-UTI Energy is trading at a lower price-to-earnings ratio than Ranger Energy Services, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Ranger Energy Services has a beta of 0.25, meaning that its share price is 75% less volatile than the S&P 500. Comparatively, Patterson-UTI Energy has a beta of 0.79, meaning that its share price is 21% less volatile than the S&P 500.

Dividends

Ranger Energy Services pays an annual dividend of $0.24 per share and has a dividend yield of 1.9%. Patterson-UTI Energy pays an annual dividend of $0.40 per share and has a dividend yield of 4.0%. Ranger Energy Services pays out 40.0% of its earnings in the form of a dividend. Patterson-UTI Energy pays out -666.7% 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. Ranger Energy Services has raised its dividend for 2 consecutive years. Patterson-UTI Energy is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider & Institutional Ownership

68.1% of Ranger Energy Services shares are owned by institutional investors. Comparatively, 97.9% of Patterson-UTI Energy shares are owned by institutional investors. 2.8% of Ranger Energy Services shares are owned by insiders. Comparatively, 2.2% of Patterson-UTI Energy 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.

Summary

Ranger Energy Services beats Patterson-UTI Energy on 9 of the 17 factors compared between the two stocks.

About Ranger Energy Services

Ranger Energy Services, Inc. provides onshore high specification well service rigs, wireline services, and complementary services to exploration and production companies in the United States. It operates through three segments: High Specification Rigs, Wireline Services, and Processing Solutions and Ancillary Services. The High Specification Rigs segment offers well service rigs and complementary equipment and services to facilitate operations throughout the lifecycle of a well; and well maintenance services. This segment also has a fleet of 402 well service rigs. The Wireline Services segment provides wireline production and intervention services to provide information to identify and resolve well production problems through cased hole logging, perforating, mechanical, and pipe recovery services; wireline completion services that are used primarily for pump down perforating operations to create perforations or entry holes through the production casing; and pumping services. This segment also has a fleet of 66 wireline units and 29 high-pressure pump trucks. The Processing Solutions and Ancillary Services segment rents well service-related equipment consisting of fluid pumps, power swivels, well control packages, hydraulic catwalks, frac tanks, pipe racks, and pipe handling tools; and coiled tubing, decommissioning, and snubbing services, as well as provides proprietary and modular equipment for the processing of natural gas streams. This segment also engages in the rental, installation, commissioning, start up, operation, and maintenance of mechanical refrigeration units, nitrogen gas liquid stabilizer units, nitrogen gas liquid storage units, and related equipment. Ranger Energy Services, Inc. was incorporated in 2017 and is headquartered in Houston, Texas.

About Patterson-UTI Energy

Patterson-UTI Energy, Inc., through its subsidiaries, engages in the provision of contract drilling services to oil and natural gas operators in the United States and internationally. It operates through three segments: Drilling Services, Completion Services, and Drilling Products. The Contract Drilling Services segment provides contract and directional drilling services in onshore oil and natural gas basins, as well as engages in the service and re-certification of equipment for drilling contractors, and provision of electrical controls and automation to the energy, marine and mining industries. The Completion Services segment offers services for hydraulic fracturing, wireline and pumping, completion support, and cementing; and involved in the power solutions natural gas fueling, and logistics and storage businesses. The Drilling Products segment manufactures and distributes drill bits for energy and mining markets. It also provides software and services, such as MWD Survey FDIR, a data analytics technology to analyze MWD survey data in real-time and identify the position of a well; HiFi Nav, which enhances FDIR by targeting improved vertical placement of the directional well within the reservoir; HiFi Guidance, utilizes trajectory optimization to determine optimal steering recommendations and placement within the reservoir; and rents oilfield tools. The company was founded in 1978 and is headquartered in Houston, Texas.