Head to Head Analysis: Weatherford International (NASDAQ:WFRD) vs. Seadrill (NYSE:SDRL)

Seadrill (NYSE:SDRL) and Weatherford International (NASDAQ:WFRD) are both mid-cap energy companies, but which is the better stock? We will compare the two companies based on the strength of their valuation, earnings, analyst recommendations, institutional ownership, dividends, profitability and risk.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Seadrill and Weatherford International, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Seadrill	1	2	3	3	2.89
Weatherford International	1	2	7	0	2.60

Seadrill currently has a consensus target price of $59.40, indicating a potential upside of 19.83%. Weatherford International has a consensus target price of $114.25, indicating a potential upside of 19.95%. Given Weatherford International’s higher possible upside, analysts plainly believe Weatherford International is more favorable than Seadrill.

Dividends

Seadrill pays an annual dividend of $4.00 per share and has a dividend yield of 8.1%. Weatherford International pays an annual dividend of $1.10 per share and has a dividend yield of 1.2%. Seadrill pays out 13,333.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Weatherford International pays out 21.7% of its earnings in the form of a dividend.

Institutional & Insider Ownership

95.7% of Seadrill shares are owned by institutional investors. Comparatively, 97.2% of Weatherford International shares are owned by institutional investors. 0.5% of Seadrill shares are owned by insiders. Comparatively, 2.1% of Weatherford International shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Seadrill and Weatherford International’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Seadrill	0.07%	0.64%	0.46%
Weatherford International	7.66%	21.50%	7.09%

Earnings and Valuation

This table compares Seadrill and Weatherford International”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Seadrill	$1.53 billion	2.02	-$77.00 million	$0.03	1,652.37
Weatherford International	$4.78 billion	1.43	$431.00 million	$5.07	18.79

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

Volatility and Risk

Seadrill has a beta of 1.22, meaning that its stock price is 22% more volatile than the S&P 500. Comparatively, Weatherford International has a beta of 0.9, meaning that its stock price is 10% less volatile than the S&P 500.

Summary

Weatherford International beats Seadrill on 11 of the 17 factors compared between the two stocks.

About Seadrill

Seadrill Ltd. engages in the provision of offshore drilling services to the oil and gas industry. It operates through the following segments: Floaters, Jack-up rigs, and Other. The Floaters segment encompasses drilling, completion, and maintenance of offshore exploration and production wells. the Jack-up Rigs segment includes drilling contracts relate to jack-up rigs for operations in harsh and benign environments in shallow water. The Other segment represents management services to third parties and related parties. The company was founded on May 10, 2005 and is headquartered in Hamilton, Bermuda.

About Weatherford International

Weatherford International plc, an energy services company, provides equipment and services for the drilling, evaluation, completion, production, and intervention of oil, geothermal, and natural gas wells worldwide. The company operates through three segments: Drilling and Evaluation; Well Construction and Completions; and Production and Intervention. It offers artificial lift systems, including reciprocating rod, progressing cavity pumping, gas, hydraulic, plunger, and hybrid lift systems, as well as related automation and control systems; pressure pumping and reservoir stimulation services, such as acidizing, fracturing, cementing, and coiled-tubing intervention; and software, automation and flow measurement solutions. The company also provides safety, downhole reservoir monitoring, flow control, and multistage fracturing systems, as well as sand-control technologies, and production and isolation packers; liner hangers to suspend a casing string in high-temperature and high-pressure wells; cementing products, including plugs, float and stage equipment, and torque-and-drag reduction technology for zonal isolation; and pre-job planning and installation services. In addition, it offers directional drilling services, and logging and measurement services while drilling; services related to rotary-steerable systems, high temperature and high pressure sensors, drilling reamers, and circulation subs; rotating control devices and advanced automated control systems, as well as closed loop drilling, air drilling, managed-pressure drilling, and underbalanced drilling services; open-hole and cased-hole logging services; and intervention and remediation services. Further, it provides tubular handling, management, and connection services; and re-entry, fishing, and well abandonment services, as well as patented bottom hole, tubular-handling equipment, pressure-control equipment, and drill pipe and collars. The company was incorporated in 1972 and is based in Houston, Texas.