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

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

Volatility & Risk

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

Analyst Recommendations

This is a summary of current ratings and recommmendations for Royale Energy and Nabors Industries, as provided by MarketBeat.

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

Nabors Industries has a consensus target price of $42.1250, suggesting a potential upside of 16.72%. Given Nabors Industries’ stronger consensus rating and higher probable upside, analysts clearly believe Nabors Industries is more favorable than Royale Energy.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Royale Energy	-165.12%	N/A	N/A
Nabors Industries	-3.51%	-35.99%	-4.08%

Institutional & Insider Ownership

81.9% of Nabors Industries shares are held by institutional investors. 61.8% of Royale Energy shares are held by company insiders. Comparatively, 5.4% of Nabors Industries shares are held 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.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Royale Energy	$2.23 million	1.78	-$3.49 million	($0.04)	-1.03
Nabors Industries	$3.03 billion	0.19	-$176.08 million	($14.06)	-2.57

Royale Energy has higher earnings, but lower revenue 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.

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.

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.