Analyzing Nabors Industries (NYSE:NBR) and Royale Energy (OTCMKTS:ROYL)

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

Valuation & Earnings

This table compares Nabors Industries and Royale Energy”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Nabors Industries	$2.97 billion	0.17	-$176.08 million	($14.06)	-2.25
Royale Energy	$2.23 million	1.68	-$3.49 million	($0.04)	-0.97

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

Profitability

This table compares Nabors Industries and Royale Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Nabors Industries	-3.51%	-35.99%	-4.08%
Royale Energy	-133.58%	N/A	N/A

Insider & Institutional Ownership

81.9% of Nabors Industries shares are owned by institutional investors. 7.3% of Nabors Industries shares are owned by insiders. Comparatively, 61.8% of Royale Energy shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Nabors Industries and Royale Energy, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Nabors Industries	3	4	1	0	1.75
Royale Energy	0	0	0	0	0.00

Nabors Industries presently has a consensus price target of $41.63, suggesting a potential upside of 31.52%. Given Nabors Industries’ stronger consensus rating and higher probable upside, research analysts plainly believe Nabors Industries is more favorable than Royale Energy.

Volatility & Risk

Nabors Industries has a beta of 1.52, indicating that its share price is 52% more volatile than the S&P 500. Comparatively, Royale Energy has a beta of -0.66, indicating that its share price is 166% less volatile than the S&P 500.

About Nabors Industries

Nabors Industries Ltd. provides drilling and drilling-related services for land-based and offshore oil and natural gas wells in the United States and internationally. The company operates through four segments: U.S. Drilling, International Drilling, Drilling Solutions, and Rig Technologies. It provides tubular running services, including casing and tubing running, and torque monitoring; managed pressure drilling services; and drilling-bit steering systems and rig instrumentation software. The company also offers drilling systems comprising ROCKit, a directional steering control system; SmartNAV, a collaborative guidance and advisory platform; SmartSLIDE, a directional steering control system; and RigCLOUD, a digital infrastructure to integrate applications to deliver real-time insight into operations across the rig fleet. In addition, it operates a fleet of land-based drilling rigs and marketed platforms rigs; manufactures and sells top drives, catwalks, wrenches, drawworks, and other drilling related equipment, such as robotic systems and downhole tools; and provides aftermarket sales and services for the installed base of its equipment. Nabors Industries Ltd. was founded in 1952 and is based in Hamilton, Bermuda.

About Royale Energy

Royale Energy, Inc. acquires, explores for, develops, produces, and sells oil and natural gas properties in the United States. Its principal operations are located in the Sacramento Basin and San Joaquin Basin in California, as well as in Utah, Texas, Oklahoma, Louisiana, and Colorado. Royale Energy, Inc. was incorporated in 1986 and is based in El Cajon, California.