Reviewing Transocean (NYSE:RIG) and SBM Offshore (OTCMKTS:SBFFY)
by Tristan Rich · The Markets DailySBM Offshore (OTCMKTS:SBFFY – Get Free Report) and Transocean (NYSE:RIG – Get Free Report) are both energy companies, but which is the better investment? We will compare the two companies based on the strength of their risk, dividends, earnings, profitability, valuation, analyst recommendations and institutional ownership.
Valuation and Earnings
This table compares SBM Offshore and Transocean”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| SBM Offshore | N/A | N/A | N/A | $1.13 | 34.83 |
| Transocean | $3.96 billion | 1.61 | -$2.92 billion | ($1.88) | -3.04 |
SBM Offshore has higher earnings, but lower revenue than Transocean. Transocean is trading at a lower price-to-earnings ratio than SBM Offshore, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
67.7% of Transocean shares are owned by institutional investors. 9.7% of Transocean shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
Profitability
This table compares SBM Offshore and Transocean’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| SBM Offshore | N/A | N/A | N/A |
| Transocean | -40.24% | 2.60% | 1.37% |
Analyst Ratings
This is a breakdown of recent ratings and target prices for SBM Offshore and Transocean, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| SBM Offshore | 0 | 1 | 0 | 0 | 2.00 |
| Transocean | 3 | 4 | 3 | 1 | 2.18 |
Transocean has a consensus price target of $6.82, suggesting a potential upside of 19.46%. Given Transocean’s stronger consensus rating and higher probable upside, analysts plainly believe Transocean is more favorable than SBM Offshore.
Summary
Transocean beats SBM Offshore on 9 of the 12 factors compared between the two stocks.
About SBM Offshore
SBM Offshore N.V. provides floating production solutions to the offshore energy industry worldwide. It operates in two segments, Lease and Operate, and Turnkey. It engages in the design, supply, installation, operation, lease, and life extension of floating production storage and offloading (FPSO) vessels, as well as semi-submersibles, tension leg floaters, turret mooring systems, floating offshore wind, and brownfield and offshore loading terminals. The company also provides catenary anchor leg mooring (CALM) or single point mooring (SPM) terminals; and solutions for flexible flowline and subsea structure installation works. It operates a fleet of 15 FPSOs and 1 semi-submersible unit. The company was formerly known as IHC Caland and changed its name to SBM Offshore N.V. in 2005. SBM Offshore N.V. was founded in 1862 and is headquartered in Schiphol, the Netherlands.
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.