Financial Survey: Pason Systems (OTCMKTS:PSYTF) versus Valaris (NYSE:VAL)

Pason Systems (OTCMKTS:PSYTF) and Valaris (NYSE:VAL) are both energy companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, earnings, profitability, dividends, analyst recommendations, risk and institutional ownership.

Profitability

This table compares Pason Systems and Valaris’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Pason Systems	N/A	N/A	N/A
Valaris	49.33%	12.58%	5.63%

Analyst Ratings

This is a breakdown of current recommendations for Pason Systems and Valaris, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Pason Systems	0	0	0	0	N/A
Valaris	0	2	5	0	2.71

Valaris has a consensus target price of $86.50, indicating a potential upside of 51.89%. Given Valaris’ higher probable upside, analysts clearly believe Valaris is more favorable than Pason Systems.

Valuation & Earnings

This table compares Pason Systems and Valaris”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Pason Systems	N/A	N/A	N/A	$1.07	9.16
Valaris	$2.07 billion	1.99	$865.40 million	$11.43	4.98

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

Dividends

Pason Systems pays an annual dividend of $0.47 per share and has a dividend yield of 4.8%. Valaris pays an annual dividend of $1.48 per share and has a dividend yield of 2.6%. Pason Systems pays out 44.0% of its earnings in the form of a dividend. Valaris pays out 12.9% 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.

Institutional and Insider Ownership

46.7% of Pason Systems shares are owned by institutional investors. Comparatively, 96.7% of Valaris shares are owned by institutional investors. 0.1% of Valaris shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

Valaris beats Pason Systems on 10 of the 12 factors compared between the two stocks.

About Pason Systems

Pason Systems Inc., together with its subsidiaries, provides instrumentation and data management systems for drilling rigs in Canada, the United States, and internationally. The company provides Electronic Drilling Recorder, which provides real-time drilling data to rig site personnel; DataHub with Pason Live, which is used as the central repository for data and reports captured at the rigs for real-time; and DataLink that provides automated in-house databases, third-party analytics platforms, remote geosteering, and other remote services. It offers AutoDriller to maximize the rate of penetration and bit life; internet solutions, such as auto-aiming satellite dishes, data modems, and bandwidth management software; DAS, a rotary drilling automation and optimization software; Electronic Choke Actuator that controls the choke valve; Gas Analyzer that provides real-time compositional gas analysis; Hazardous Gas Alarm System that detects the presence of hazardous gases; Pit Volume Totalizer, which monitors mud volumes and flow rates during drilling, tripping, and casing operations; and Toolface Control, a directional automation software. In addition, the company provides phone, chat, field, and drilling optimization support, as well as proactive monitoring and office support for data integration. It serves drilling contractors and other oilfield service companies. Pason Systems Inc. was founded in 1978 and is headquartered in Calgary, Canada.

About Valaris

Valaris Limited, together with its subsidiaries, provides offshore contract drilling services Gulf of Mexico, South America, North Sea, the Middle East, Africa, and the Asia Pacific. The company operates through four segments: Floaters, Jackups, ARO, and Other. It owns an offshore drilling rig fleet, which include drillships, dynamically positioned semisubmersible rigs, moored semisubmersible rig, and jackup rigs. It serves international, government-owned, and independent oil and gas. Valaris Limited was founded in 1975 and is based in Hamilton, Bermuda.