Critical Review: Transocean Partners (RIGP) and Its Competitors

Transocean Partners (NYSE: RIGP) is one of 17 publicly-traded companies in the “Oil & Gas Drilling” industry, but how does it compare to its peers? We will compare Transocean Partners to similar companies based on the strength of its earnings, dividends, risk, valuation, profitability, analyst recommendations and institutional ownership.

Valuation & Earnings

This table compares Transocean Partners and its peers gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Transocean Partners N/A N/A 7.40
Transocean Partners Competitors $1.59 billion -$49.50 million 85.61

Transocean Partners’ peers have higher revenue, but lower earnings than Transocean Partners. Transocean Partners is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Transocean Partners and its peers, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Transocean Partners 0 0 1 0 3.00
Transocean Partners Competitors 497 1564 1262 58 2.26

Transocean Partners presently has a consensus target price of $18.00, indicating a potential upside of 0.95%. As a group, “Oil & Gas Drilling” companies have a potential upside of 17.46%. Given Transocean Partners’ peers higher possible upside, analysts clearly believe Transocean Partners has less favorable growth aspects than its peers.

Profitability

This table compares Transocean Partners and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Transocean Partners 53.12% 13.03% 15.28%
Transocean Partners Competitors -17.17% -4.72% -1.12%

Insider & Institutional Ownership

29.0% of Transocean Partners shares are owned by institutional investors. Comparatively, 72.7% of shares of all “Oil & Gas Drilling” companies are owned by institutional investors. 0.1% of Transocean Partners shares are owned by company insiders. Comparatively, 2.2% of shares of all “Oil & Gas Drilling” companies are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Dividends

Transocean Partners pays an annual dividend of $1.45 per share and has a dividend yield of 8.1%. Transocean Partners pays out 60.2% of its earnings in the form of a dividend. As a group, “Oil & Gas Drilling” companies pay a dividend yield of 4.3% and pay out -141.8% of their earnings in the form of a dividend. Transocean Partners has raised its dividend for 2 consecutive years.

Transocean Partners Company Profile

Transocean Partners LLC a limited liability company. The Company is formed by Transocean Partners Holdings Limited and a subsidiary of Transocean Ltd. (Transocean), to own, operate and acquire advanced offshore drilling rigs. The Company’s assets consist of over 50% ownership interest in each of the entities that owns and operates over three ultra-deepwater drilling rigs that are operating in the U.S. Gulf of Mexico, which include Discoverer Clear Leader, Discoverer Inspiration and Development Driller III. The Company owns or has partial ownership interests in, and operated over 60 mobile offshore drilling units, including approximately 30 ultra-deepwater floaters, over seven harsh environment floaters, approximately five deepwater floaters, over 10 midwater floaters and approximately 10 high-specification jackups. Transocean also has approximately six ultra-deepwater drillships and over five high-specification jackups under construction.

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