Comparing SLB (NYSE:SLB) and Seadrill (NYSE:SDRL)

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

Risk and Volatility

Seadrill has a beta of 1.25, indicating that its stock price is 25% more volatile than the S&P 500. Comparatively, SLB has a beta of 0.83, indicating that its stock price is 17% less volatile than the S&P 500.

Insider and Institutional Ownership

95.7% of Seadrill shares are owned by institutional investors. Comparatively, 82.0% of SLB shares are owned by institutional investors. 0.5% of Seadrill shares are owned by company insiders. Comparatively, 0.2% of SLB shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Seadrill and SLB, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Seadrill	0	2	3	4	3.22
SLB	1	2	24	0	2.85

Seadrill currently has a consensus target price of $59.40, suggesting a potential upside of 28.67%. SLB has a consensus target price of $62.38, suggesting a potential upside of 27.51%. Given Seadrill’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Seadrill is more favorable than SLB.

Earnings and Valuation

This table compares Seadrill and SLB”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Seadrill	$1.44 billion	2.01	-$77.00 million	$0.03	1,538.80
SLB	$35.71 billion	2.03	$3.37 billion	$2.07	23.63

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

Profitability

This table compares Seadrill and SLB’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%
SLB	8.53%	14.05%	6.95%

Summary

SLB beats Seadrill on 8 of the 15 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 SLB

Schlumberger Limited engages in the provision of technology for the energy industry worldwide. The company operates through four divisions: Digital & Integration, Reservoir Performance, Well Construction, and Production Systems. The company provides field development and hydrocarbon production, carbon management, and integration of adjacent energy systems; reservoir interpretation and data processing services for exploration data; and well construction and production improvement services and products. It also offers subsurface geology and fluids evaluation information; open and cased hole services; exploration and production pressure, and flow-rate measurement services; and pressure pumping, well stimulation, and coiled tubing equipment solutions. In addition, the company offers mud logging, directional drilling, measurement-while-drilling, and logging-while-drilling services, as well as engineering support services; supplies drilling fluid systems; designs, manufactures, and markets roller cone and fixed cutter drill bits; bottom-hole-assembly and borehole enlargement technologies; well cementing products and services; well planning, well drilling, engineering, supervision, logistics, procurement, and contracting of third parties, as well as drilling rig management solutions; and drilling equipment and services, as well as land drilling rigs and related services. Further, it provides artificial lift production equipment and optimization services; supplies packers, safety valves, sand control technology, and various intelligent well completions technology and equipment; designs and manufactures valves, chokes, actuators, and surface trees; and OneSubsea, an integrated solutions, products, systems, and services, including wellheads, subsea trees, manifolds and flowline connectors, control systems, connectors, and services. The company was formerly known as Socie´te´ de Prospection E´lectrique. Schlumberger Limited was founded in 1926 and is based in Houston, Texas.