Nabors Industries (NYSE:NBR) versus Valaris (NYSE:VALPQ) Financial Analysis

Valaris (OTCMKTS:VALPQ) and Nabors Industries (NYSE:NBR) are both small-cap transportation companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, dividends, risk, earnings, profitability and valuation.

Analyst Ratings

This is a summary of recent ratings and price targets for Valaris and Nabors Industries, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Valaris 1 0 0 0 1.00
Nabors Industries 11 7 0 0 1.39

Valaris currently has a consensus target price of $0.06, suggesting a potential downside of 30.80%. Nabors Industries has a consensus target price of $51.77, suggesting a potential upside of 76.70%. Given Nabors Industries’ stronger consensus rating and higher possible upside, analysts clearly believe Nabors Industries is more favorable than Valaris.

Insider & Institutional Ownership

62.2% of Valaris shares are held by institutional investors. Comparatively, 56.1% of Nabors Industries shares are held by institutional investors. 0.5% of Valaris shares are held by company insiders. Comparatively, 4.9% of Nabors Industries 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.

Risk & Volatility

Valaris has a beta of 2.54, indicating that its stock price is 154% more volatile than the S&P 500. Comparatively, Nabors Industries has a beta of 3.24, indicating that its stock price is 224% more volatile than the S&P 500.

Profitability

This table compares Valaris and Nabors Industries’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Valaris -237.15% -15.28% -7.57%
Nabors Industries -33.84% -21.14% -6.05%

Earnings & Valuation

This table compares Valaris and Nabors Industries’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Valaris $2.05 billion 0.01 -$198.00 million ($5.83) -0.01
Nabors Industries $3.05 billion 0.08 -$702.89 million ($66.00) -0.44

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

Summary

Nabors Industries beats Valaris on 8 of the 13 factors compared between the two stocks.

Valaris Company Profile

Valaris plc provides offshore drilling services in various water depths worldwide. It operates a rig fleet of ultra-deepwater drillships, versatile semisubmersibles, and modern shallow-water jackups. The company's offshore fleet includes 16 drillships, 12 semisubmersibles, 54 jackups, and 2 deepwater managed units. The company was formerly known as Ensco Rowan plc and changed its name to Valaris plc in July 2019. Valaris plc was incorporated in 2009 and is based in London, the United Kingdom. On August 19, 2020, Valaris plc, along with its affiliates, filed a voluntary petition for reorganization under Chapter 11 in the U.S. Bankruptcy Court for the Southern District of Texas.

Nabors Industries Company Profile

Nabors Industries Ltd. provides drilling and drilling-related services and technologies for land-based and offshore oil and natural gas wells. It operates through five segments: U.S. Drilling, Canada Drilling, International Drilling, Drilling Solutions, and Rig Technologies. The company offers equipment manufacturing, rig instrumentation, optimization software, and directional drilling services. It also provides patented steering systems and rig instrumentation software systems, including RigWatch Suite, a software, which turns rig site data into wellsite knowledge that help customers to track and trend drilling practices; REVit Software that eliminates stick slip; DrillSmart software that allows the drilling system to adapt operating parameters and drilling conditions; and ROCKit Software, a directional steering control system. In addition, the company offers measurement while drilling (MWD) systems and services, such as AccuMP mud pulse MWD system, which is designed to address the various MWD reliability issues; AccuWave collar mounted Electromagnetic MWD system that addresses the needs of the land market through the technology and design techniques; and Nabors' AccuSteer Measurement While Drilling (M/LWD) Suite, which is a premier dynamics evaluation MWD system for performance drilling with integrated advanced geosteering measurements. Further, it manufactures and sells top drives, catwalks, wrenches, draw works, and other drilling related equipment, such as robotic systems and downhole tools; and provides automated tubular and tool handling equipment, and downhole LWD tools. As of December 31, 2018, the company marketed approximately 384 rigs for land-based drilling operations in the United States and Canada, as well as in 18 other countries worldwide; and 33 rigs for offshore drilling operations in the United States and internationally. Nabors Industries Ltd. was founded in 1952 and is headquartered in Hamilton, Bermuda.

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