Schlumberger (NYSE:SLB) and Key Energy Services (OTCMKTS:KEGX) are both oils/energy companies, but which is the superior stock? We will contrast the two companies based on the strength of their earnings, profitability, analyst recommendations, dividends, institutional ownership, valuation and risk.

Institutional & Insider Ownership

76.7% of Schlumberger shares are owned by institutional investors. Comparatively, 32.3% of Key Energy Services shares are owned by institutional investors. 0.5% of Schlumberger shares are owned by company insiders. Comparatively, 1.6% of Key Energy Services shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Schlumberger and Key Energy Services’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Schlumberger -30.80% 6.77% 3.22%
Key Energy Services -20.26% -2,602.22% -23.27%

Volatility & Risk

Schlumberger has a beta of 1.64, suggesting that its stock price is 64% more volatile than the S&P 500. Comparatively, Key Energy Services has a beta of 3.56, suggesting that its stock price is 256% more volatile than the S&P 500.

Valuation and Earnings

This table compares Schlumberger and Key Energy Services’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Schlumberger $32.92 billion 1.44 -$10.14 billion $1.47 23.33
Key Energy Services $521.70 million 0.00 -$88.80 million ($4.53) -0.02

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

Analyst Recommendations

This is a breakdown of recent recommendations for Schlumberger and Key Energy Services, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Schlumberger 2 6 14 0 2.55
Key Energy Services 0 1 0 0 2.00

Schlumberger presently has a consensus price target of $42.71, suggesting a potential upside of 24.56%. Given Schlumberger’s stronger consensus rating and higher possible upside, equities analysts clearly believe Schlumberger is more favorable than Key Energy Services.

Summary

Schlumberger beats Key Energy Services on 9 of the 14 factors compared between the two stocks.

Schlumberger Company Profile

Schlumberger Limited supplies technology for reservoir characterization, drilling, production, and processing to the oil and gas industry worldwide. The company's Reservoir Characterization segment offers reservoir interpretation and data processing services; open and cased-hole, and slickline services; exploration and production pressure and flow-rate measurement services; tubing-conveyed perforating services; integrated production systems; software, consulting, information management, and IT infrastructure services; reservoir characterization, field development planning, and production enhancement consulting services; petro technical data services and training solutions; and integrated management services. Its Drilling segment designs, manufactures, and markets roller cone and fixed cutter drill bits; supplies drilling fluid systems, fluid systems and specialty equipment, production technology solutions, and engineered managed pressure and underbalanced drilling solutions; and offers environmental services and products. This segment also provides drilling and measurement, land drilling rigs, and related support services; and supplies well planning and drilling, engineering, supervision, logistics, procurement, and contracting services, as well as drilling rig management services. The company's Production segment offers well services; coiled tubing equipment; hydraulic fracturing, multistage completions, perforating, coiled tubing equipment, and services; well completion services and equipment; artificial lift production equipment and optimization services; and production management services. Its Cameron segment offers integrated subsea production systems; drilling equipment and services; onshore and offshore platform wellhead systems and processing solutions; and valve products and measurement systems. The company was formerly known as Socie´te´ de Prospection E´lectrique. Schlumberger Limited was founded in 1926 and is based in Houston, Texas.

Key Energy Services Company Profile

Key Energy Services, Inc. operates as an onshore rig-based well servicing contractor in the United States. It operates through Rig Services, Fishing and Rental Services, Coiled Tubing Services, and Fluid Management Services segments. The Rig Services segment is involved in the completion of newly drilled wells; workover and recompletion of existing oil and natural gas wells; well maintenance activities; and plugging and abandonment of wells at the end of their useful lives, as well as provision of specialty drilling services to oil and natural gas producers. The Fishing and Rental Services segment provides fishing services that involve recovering lost or stuck equipment in the wellbore utilizing fishing tools; and rents drill pipes, tubulars, handling tools, pressure-control equipment, pumps, power swivels, reversing units, and foam air units. The Coiled Tubing Services segment offers services for wellbore clean-outs, nitrogen jet lifts, through-tubing fishing, and formation stimulations; mills temporary isolation plugs that separate frac zones; and other pre- and post-hydraulic fracturing well preparation services. The Fluid Management Services segment offers transportation and well-site storage services for fluids utilized in drilling, completions, workover, and maintenance activities; and disposal services for fluids produced subsequent to well completion. It also operates a fleet of hot oilers used to clear soluble restrictions in a wellbore. The company was formerly known as Key Energy Group, Inc. and changed its name to Key Energy Services, Inc. in December 1998. Key Energy Services, Inc. was founded in 1977 and is based in Houston, Texas.

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