Head-To-Head Analysis: Helmerich & Payne (NYSE:HP) versus SLB (NYSE:SLB)

Helmerich & Payne (NYSE:HP) and SLB (NYSE:SLB) are both energy companies, but which is the superior investment? We will compare the two companies based on the strength of their risk, analyst recommendations, earnings, valuation, profitability, dividends and institutional ownership.

Institutional and Insider Ownership

96.1% of Helmerich & Payne shares are held by institutional investors. Comparatively, 82.0% of SLB shares are held by institutional investors. 4.4% of Helmerich & Payne shares are held by company insiders. Comparatively, 0.2% of SLB shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Earnings & Valuation

This table compares Helmerich & Payne and SLB”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Helmerich & Payne	$4.00 billion	0.85	-$163.70 million	($3.79)	-9.00
SLB	$35.71 billion	2.05	$3.37 billion	$2.07	23.83

SLB has higher revenue and earnings than Helmerich & Payne. Helmerich & Payne is trading at a lower price-to-earnings ratio than SLB, indicating that it is currently the more affordable of the two stocks.

Dividends

Helmerich & Payne pays an annual dividend of $1.00 per share and has a dividend yield of 2.9%. SLB pays an annual dividend of $1.18 per share and has a dividend yield of 2.4%. Helmerich & Payne pays out -26.4% of its earnings in the form of a dividend. SLB pays out 57.0% 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. SLB has increased its dividend for 5 consecutive years. Helmerich & Payne is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a breakdown of recent recommendations for Helmerich & Payne and SLB, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Helmerich & Payne	2	5	5	0	2.25
SLB	2	1	18	2	2.87

Helmerich & Payne currently has a consensus price target of $39.80, suggesting a potential upside of 16.71%. SLB has a consensus price target of $61.35, suggesting a potential upside of 24.39%. Given SLB’s stronger consensus rating and higher possible upside, analysts clearly believe SLB is more favorable than Helmerich & Payne.

Profitability

This table compares Helmerich & Payne and SLB’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Helmerich & Payne	-9.38%	-1.16%	-0.48%
SLB	8.53%	14.05%	6.95%

Volatility and Risk

Helmerich & Payne has a beta of 0.6, indicating that its share price is 40% less volatile than the S&P 500. Comparatively, SLB has a beta of 0.73, indicating that its share price is 27% less volatile than the S&P 500.

Summary

SLB beats Helmerich & Payne on 14 of the 18 factors compared between the two stocks.

About Helmerich & Payne

Founded in 1920, Helmerich & Payne, Inc. (H&P) (NYSE: HP) is committed to delivering industry leading levels of drilling productivity and reliability. H&P operates with the highest level of integrity, safety and innovation to deliver superior results for its customers and returns for shareholders. Through its subsidiaries, the Company designs, fabricates and operates high-performance drilling rigs in conventional and unconventional plays around the world. H&P also develops and implements advanced automation, directional drilling and survey management technologies. H&P’s fleet includes 299 land rigs in the U.S., 31 international land rigs and eight offshore platform rigs.

About SLB

Schlumberger Limited engages in the provision of technology for the energy industry worldwide. The company operates through four divisions: Digital & Integration, Reservoir Performance, Well Construction, and Production Systems. The company provides field development and hydrocarbon production, carbon management, and integration of adjacent energy systems; reservoir interpretation and data processing services for exploration data; and well construction and production improvement services and products. It also offers subsurface geology and fluids evaluation information; open and cased hole services; exploration and production pressure, and flow-rate measurement services; and pressure pumping, well stimulation, and coiled tubing equipment solutions. In addition, the company offers mud logging, directional drilling, measurement-while-drilling, and logging-while-drilling services, as well as engineering support services; supplies drilling fluid systems; designs, manufactures, and markets roller cone and fixed cutter drill bits; bottom-hole-assembly and borehole enlargement technologies; well cementing products and services; well planning, well drilling, engineering, supervision, logistics, procurement, and contracting of third parties, as well as drilling rig management solutions; and drilling equipment and services, as well as land drilling rigs and related services. Further, it provides artificial lift production equipment and optimization services; supplies packers, safety valves, sand control technology, and various intelligent well completions technology and equipment; designs and manufactures valves, chokes, actuators, and surface trees; and OneSubsea, an integrated solutions, products, systems, and services, including wellheads, subsea trees, manifolds and flowline connectors, control systems, connectors, and services. The company was formerly known as Socie´te´ de Prospection E´lectrique. Schlumberger Limited was founded in 1926 and is based in Houston, Texas.