Transocean (NYSE:RIG) vs. USA Compression Partners (NYSE:USAC) Head to Head Review

USA Compression Partners (NYSE:USAC) and Transocean (NYSE:RIG) are both mid-cap energy companies, but which is the superior business? We will contrast the two companies based on the strength of their analyst recommendations, risk, earnings, dividends, institutional ownership, valuation and profitability.

Earnings and Valuation

This table compares USA Compression Partners and Transocean”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
USA Compression Partners	$1.18 billion	3.14	$111.32 million	$1.06	24.05
Transocean	$3.96 billion	1.95	-$2.92 billion	($1.88)	-3.69

USA Compression Partners has higher earnings, but lower revenue than Transocean. Transocean is trading at a lower price-to-earnings ratio than USA Compression Partners, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares USA Compression Partners and Transocean’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
USA Compression Partners	12.43%	179.77%	4.83%
Transocean	-40.24%	2.60%	1.37%

Volatility and Risk

USA Compression Partners has a beta of 0.28, indicating that its share price is 72% less volatile than the S&P 500. Comparatively, Transocean has a beta of 1.41, indicating that its share price is 41% more volatile than the S&P 500.

Insider and Institutional Ownership

47.8% of USA Compression Partners shares are held by institutional investors. Comparatively, 67.7% of Transocean shares are held by institutional investors. 9.7% of Transocean shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of recent recommendations for USA Compression Partners and Transocean, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
USA Compression Partners	0	5	0	1	2.33
Transocean	3	4	3	2	2.33

USA Compression Partners presently has a consensus target price of $29.50, suggesting a potential upside of 15.73%. Transocean has a consensus target price of $6.68, suggesting a potential downside of 3.77%. Given USA Compression Partners’ higher possible upside, equities analysts clearly believe USA Compression Partners is more favorable than Transocean.

Summary

USA Compression Partners beats Transocean on 8 of the 14 factors compared between the two stocks.

About USA Compression Partners

USA Compression Partners, LP provides compression services under term contracts with customers in the natural gas and crude oil industries in the United States. The company engineers, designs, operates, services, and repairs its compression units; and maintains related support inventory and equipment. It also provides compression services in various shale plays, including the Utica, Marcellus, Permian Basin, Delaware Basin, Eagle Ford, Mississippi Lime, Granite Wash, Woodford, Barnett, Haynesville, Niobrara, and Fayetteville shales. As of December 31, 2017, the company had approximately 1,799,781 horsepower in its fleet. It serves oil companies; and independent producers, processors, gatherers, and transporters of natural gas and crude oil. USA Compression GP, LLC operates as the general partner of USA Compression Partners, LP. The company was formerly known as Compression Holdings, LP, and changed its name to USA Compression Partners, LP in June 2011. USA Compression Partners, LP was founded in 1998 and is headquartered in Austin, Texas.

About Transocean

Transocean Ltd., together with its subsidiaries, provides offshore contract drilling services for oil and gas wells worldwide. It contracts mobile offshore drilling rigs, related equipment, and work crews to drill oil and gas wells. The company operates a fleet of mobile offshore drilling units, consisting of ultra-deepwater floaters and harsh environment floaters. It serves integrated energy companies, government-owned or government-controlled energy companies, and other independent energy companies. The company was founded in 1926 and is based in Steinhausen, Switzerland.