Contrasting Noble (NYSE:NE) & Transocean (NYSE:RIG)

Transocean (NYSE:RIG) and Noble (NYSE:NE) are both mid-cap energy companies, but which is the better stock? We will compare the two businesses based on the strength of their profitability, dividends, risk, institutional ownership, valuation, earnings and analyst recommendations.

Institutional & Insider Ownership

67.7% of Transocean shares are held by institutional investors. Comparatively, 68.1% of Noble shares are held by institutional investors. 12.3% of Transocean shares are held by insiders. Comparatively, 1.2% of Noble shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Transocean and Noble”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Transocean	$3.97 billion	1.80	-$2.92 billion	($3.15)	-2.06
Noble	$3.29 billion	2.20	$216.72 million	$1.35	33.67

Noble has lower revenue, but higher earnings than Transocean. Transocean is trading at a lower price-to-earnings ratio than Noble, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Transocean has a beta of 1.46, meaning that its stock price is 46% more volatile than the S&P 500. Comparatively, Noble has a beta of 1.12, meaning that its stock price is 12% more volatile than the S&P 500.

Profitability

This table compares Transocean and Noble’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Transocean	-73.52%	0.41%	0.22%
Noble	6.60%	2.34%	1.40%

Analyst Ratings

This is a breakdown of current recommendations for Transocean and Noble, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Transocean	3	4	2	0	1.89
Noble	1	10	1	0	2.00

Transocean currently has a consensus target price of $5.86, indicating a potential downside of 9.43%. Noble has a consensus target price of $38.63, indicating a potential downside of 15.02%. Given Transocean’s higher probable upside, analysts plainly believe Transocean is more favorable than Noble.

Summary

Noble beats Transocean on 9 of the 14 factors compared between the two stocks.

About Transocean

Transocean Ltd., together with its subsidiaries, provides offshore contract drilling services for oil and gas wells worldwide. It contracts mobile offshore drilling rigs, related equipment, and work crews to drill oil and gas wells. The company operates a fleet of mobile offshore drilling units, consisting of ultra-deepwater floaters and harsh environment floaters. It serves integrated energy companies, government-owned or government-controlled energy companies, and other independent energy companies. The company was founded in 1926 and is based in Steinhausen, Switzerland.

About Noble

Noble Corp. Plc engages in the provision offshore drilling services for oil and gas industry. It focuses on a balanced fleet of floating and jackup rigs and the deployment of drilling rigs in oil and gas basins around the world. The company was founded by Lloyd Noble and Art Olson in 1921 and is headquartered in London, the United Kingdom.