Critical Review: Precision Drilling (NYSE:PDS) & Royal Vopak (OTCMKTS:VOPKY)

Precision Drilling (NYSE:PDS) and Royal Vopak (OTCMKTS:VOPKY) are both energy companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, valuation, profitability, risk, dividends, earnings and analyst recommendations.

Analyst Ratings

This is a summary of current ratings and price targets for Precision Drilling and Royal Vopak, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Precision Drilling	0	2	3	0	2.60
Royal Vopak	0	0	0	0	0.00

Precision Drilling presently has a consensus target price of $87.00, suggesting a potential upside of 52.58%. Given Precision Drilling’s stronger consensus rating and higher possible upside, equities analysts plainly believe Precision Drilling is more favorable than Royal Vopak.

Dividends

Precision Drilling pays an annual dividend of ($100.00) per share and has a dividend yield of -175.4%. Royal Vopak pays an annual dividend of $1.47 per share and has a dividend yield of 3.4%. Precision Drilling pays out -2,105.2% of its earnings in the form of a dividend. Royal Vopak pays out 32.4% 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.

Insider and Institutional Ownership

48.9% of Precision Drilling shares are owned by institutional investors. 1.0% of Precision Drilling shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Precision Drilling and Royal Vopak’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Precision Drilling	5.67%	6.21%	3.62%
Royal Vopak	37.14%	12.16%	5.72%

Valuation & Earnings

This table compares Precision Drilling and Royal Vopak”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Precision Drilling	$1.85 billion	0.41	$81.15 million	$4.75	12.00
Royal Vopak	$1.42 billion	3.55	$406.55 million	$4.54	9.65

Royal Vopak has lower revenue, but higher earnings than Precision Drilling. Royal Vopak is trading at a lower price-to-earnings ratio than Precision Drilling, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Precision Drilling has a beta of 1.15, meaning that its stock price is 15% more volatile than the S&P 500. Comparatively, Royal Vopak has a beta of 0.68, meaning that its stock price is 32% less volatile than the S&P 500.

Summary

Precision Drilling beats Royal Vopak on 10 of the 16 factors compared between the two stocks.

About Precision Drilling

Precision Drilling Corporation, a drilling company, provides onshore drilling, completion, and production services to exploration and production companies in the oil and natural gas and geothermal industries in North America and the Middle East. The company operates through Contract Drilling Services and Completion and Production Services segments. The Contract Drilling Services segment offers onshore well drilling services to exploration and production companies in the geothermal, oil and natural gas industry. This segment offers services include land and turnkey drilling; and procurement and distribution of oilfield supplies, as well as manufacture and repair of drilling and service rig equipment. In addition, it operates land drilling rigs in Canada, the United States, and the Middle East, as well as operates AlphaAutomation, AlphaApps, and AlphaAnalytics data services. The company offers EverGreen suite of environmental solutions comprising EverGreenMonitoring, EverGreenEnergy, and EverGreen Fuel Cell. The Completion and Production Services segment provides service rigs for well completion, workover, abandonment, maintenance, and re-entry preparation services; equipment rentals; and camp and catering services to oil and natural gas exploration and production companies. This segment operates well completion and workover service rigs in Canada and the United States. Precision Drilling Corporation was founded in 1951 and is headquartered in Calgary, Canada.

About Royal Vopak

Koninklijke Vopak N.V., an independent tank storage company, stores and handles liquid chemicals, gases, and oil products to the energy and manufacturing markets worldwide. The company operates LPG and chemical gas, industrial, chemical, and oil terminals; and owns and operates specialized facilities consisting of tanks, jetties, truck loading stations, and pipelines. It stores and handles chemicals, such as methanol, xylenes, styrene, alpha olefins, and mono-ethylene glycol; gas, including LNG, LPG, ethylene, butadiene, and ammonia; oil products consisting of crude oil, fuel oil, diesel, jet fuel, gasoline, and naphtha; and vegoils and biofuels comprising ethanol, biodiesel, and sustainable aviation fuel. In addition, the company is involved in the development of infrastructure solutions within ports for low-carbon and renewable hydrogen, CO2, long-duration energy storage, and sustainable fuels and feedstocks. Further, it operates 76 terminals in 23 countries with a storage capacity of 35.2 million cubic meters. It serves producers, manufacturers, distributors, governments, traders, and chemical and energy companies. The company was founded in 1616 and is headquartered in Rotterdam, the Netherlands.