Contrasting Drilling Tools International (NASDAQ:DTI) & Borr Drilling (NYSE:BORR)

Borr Drilling (NYSE:BORR) and Drilling Tools International (NASDAQ:DTI) are both small-cap energy companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, earnings, risk, profitability, analyst recommendations, dividends and valuation.

Valuation & Earnings

This table compares Borr Drilling and Drilling Tools International”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Borr Drilling	$1.02 billion	1.37	$45.00 million	($0.78)	-5.70
Drilling Tools International	$153.36 million	0.60	-$3.76 million	($0.09)	-28.78

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

Institutional and Insider Ownership

83.1% of Borr Drilling shares are held by institutional investors. Comparatively, 2.8% of Drilling Tools International shares are held by institutional investors. 7.9% of Borr Drilling shares are held by company insiders. Comparatively, 17.1% of Drilling Tools International shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Borr Drilling and Drilling Tools International, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Borr Drilling	1	2	0	2	2.60
Drilling Tools International	1	1	0	1	2.33

Borr Drilling currently has a consensus price target of $5.27, suggesting a potential upside of 18.49%. Drilling Tools International has a consensus price target of $2.80, suggesting a potential upside of 8.11%. Given Borr Drilling’s stronger consensus rating and higher possible upside, research analysts plainly believe Borr Drilling is more favorable than Drilling Tools International.

Profitability

This table compares Borr Drilling and Drilling Tools International’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Borr Drilling	-23.98%	-5.95%	-1.84%
Drilling Tools International	-1.97%	0.58%	0.31%

Volatility & Risk

Borr Drilling has a beta of 1.03, meaning that its stock price is 3% more volatile than the S&P 500. Comparatively, Drilling Tools International has a beta of -0.62, meaning that its stock price is 162% less volatile than the S&P 500.

Summary

Borr Drilling beats Drilling Tools International on 9 of the 14 factors compared between the two stocks.

About Borr Drilling

Borr Drilling Limited operates as an offshore shallow-water drilling contractor to the oil and gas industry worldwide. The company owns, contracts, and operates jack-up drilling rigs for operations in shallow-water areas, including the provision of related equipment and work crews to conduct oil and gas drilling and workover operations for exploration and production. It serves oil and gas exploration and production companies, such as integrated oil companies, state-owned national oil companies, and independent oil and gas companies. The company was formerly known as Magni Drilling Limited and changed its name to Borr Drilling Limited in December 2016. Borr Drilling Limited was incorporated in 2016 and is based in Hamilton, Bermuda.

About Drilling Tools International

Drilling Tools International Corporation provides oilfield equipment and services to oil and natural gas sectors in North America, Europe, and the Middle East. It offers downhole tool rentals, machining, and inspection services to support the global drilling and wellbore construction industry. The company also provides products are bottom hole assembly components, such as stabilizers, subs, non-magnetic and steel drill collars, hole openers, and roller reamers, as well as drill pipe and drill pipe accessories; ancillary equipment and handling tools to support its rental platform, including float valves, ring gauges, tool baskets, lift bail, lift subs, mud magnets, elevators, bracket and bail assemblies, slips, tongs, stabbing guides and safety clamps; and blowout preventers, and pressure control accessory equipment. In addition, it offers tool rental services, which consists of rental, inspection, machining, and repair services; rents downhole drilling tools used in horizontal and directional drilling of oil and natural gas; rents kellys, pip joints, work strings; maintains a fleet of rental equipment consisting of drill collars, stabilizers, crossover subs, wellbore conditioning tools, drill pipe, hevi-wate drill pipe, and tubing; rents surface control equipment, such as blowout preventers and handling tools; and provides downhole products for producing wells. Drilling Tools International Corporation is headquartered in Houston, Texas.