Comparing Ensco Plc (ESV) and Helmerich & Payne (HP)

Ensco Plc (NYSE: ESV) and Helmerich & Payne (NYSE:HP) are both mid-cap oils/energy companies, but which is the superior business? We will compare the two businesses based on the strength of their risk, profitability, dividends, institutional ownership, valuation, analyst recommendations and earnings.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Ensco Plc and Helmerich & Payne, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ensco Plc 3 8 11 0 2.36
Helmerich & Payne 8 13 3 0 1.79

Ensco Plc presently has a consensus target price of $8.49, suggesting a potential upside of 37.67%. Helmerich & Payne has a consensus target price of $53.95, suggesting a potential downside of 9.37%. Given Ensco Plc’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Ensco Plc is more favorable than Helmerich & Payne.

Earnings and Valuation

This table compares Ensco Plc and Helmerich & Payne’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Ensco Plc $2.78 billion 0.97 $890.20 million ($0.19) -32.47
Helmerich & Payne $1.62 billion 3.98 -$56.82 million ($1.67) -35.65

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

Profitability

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

Net Margins Return on Equity Return on Assets
Ensco Plc -3.04% -0.37% -0.22%
Helmerich & Payne -11.19% -3.37% -2.24%

Dividends

Ensco Plc pays an annual dividend of $0.04 per share and has a dividend yield of 0.6%. Helmerich & Payne pays an annual dividend of $2.80 per share and has a dividend yield of 4.7%. Ensco Plc pays out -21.1% of its earnings in the form of a dividend. Helmerich & Payne pays out -167.7% 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. Helmerich & Payne has raised its dividend for 44 consecutive years. Helmerich & Payne is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional and Insider Ownership

91.1% of Ensco Plc shares are owned by institutional investors. 0.6% of Ensco Plc shares are owned by company insiders. Comparatively, 3.9% of Helmerich & Payne shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Volatility and Risk

Ensco Plc has a beta of 1.82, meaning that its share price is 82% more volatile than the S&P 500. Comparatively, Helmerich & Payne has a beta of 1.26, meaning that its share price is 26% more volatile than the S&P 500.

Summary

Ensco Plc beats Helmerich & Payne on 11 of the 16 factors compared between the two stocks.

About Ensco Plc

Ensco plc is an offshore contract drilling company. The Company provides offshore contract drilling services to the international oil and gas industry. Its segments include Floaters, Jackups and Other. The Floaters segment includes its drillships and semisubmersible rigs, and provides contract drilling. Other consists of management services on rigs owned by third parties. The Floaters and the Jackups segments provide contract drilling. It owned and operated an offshore drilling rig fleet of 57 rigs, including two rigs under construction, with drilling operations around the world, as of December 31, 2016. As of December 31, 2016, its rig fleet included eight drill ships, 10 dynamically positioned semisubmersible rigs, three moored semisubmersible rigs and 38 jackup rigs. As of December 31, 2016, of its 59 rigs, 25 were located in the Middle East, Africa and Asia Pacific, 16 were located in North and South America (including Brazil) and 18 were located in Europe and the Mediterranean.

About Helmerich & Payne

Helmerich & Payne, Inc. is engaged in contract drilling of oil and gas wells for others. The Company operates in the contract drilling industry. The Company’s contract drilling business consists of three segments: U.S. Land, Offshore and International Land. The Company is also engaged in the ownership, development and operation of commercial real estate and the research and development of rotary steerable technology. Its real estate investments are located within Tulsa, Oklahoma, and include a shopping center containing approximately 441,000 leasable square feet, multi-tenant industrial warehouse properties containing approximately one million leasable square feet and approximately 210 acres of undeveloped real estate. The Company provides drilling rigs, equipment, personnel and camps on a contract basis. The Company’s subsidiaries include Helmerich & Payne International Drilling Co. and Helmerich & Payne de Venezuela, C.A.

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