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It's been a little while since we looked at Transocean (RIG) so I thought it might be interesting to compare it to another deep water drilling rig company, Noble (NE). Both seems to be in the same boat and both have taken a big hit in share price since the Macondo incident. In the past year both stocks have done even worse than the general market as compared to the Value Line Index. While Transocean lost 39% in the last year, Noble was down 14% in a market that was only down 3%:

Let's see how the stocks stack up in other areas.

Profiles:

Transocean Ltd. provides offshore contract drilling services for oil and gas wells worldwide. It offers deepwater and harsh environment drilling, oil and gas drilling management, and drilling engineering and drilling project management services. The company also offers well and logistics services. In addition, it engages in oil and gas exploration, development, and production activities primarily in the United States offshore Louisiana and Texas, and in the United Kingdom sector of the North Sea.

As of February 10, 2011, the company owned, had partial ownership interests in, and operated 138 mobile offshore drilling units, including 47 high-specification floaters, 25 midwater floaters, 9 high-specification jackups, 54 standard jackups, and 3 other rigs, as well as 1 ultra-deepwater floater and 3 high-specification jackups under construction. Transocean Ltd. was founded in 1953 and is based in Zug, Switzerland. (Yahoo Finance profile)

Noble Corporation operates as an offshore drilling contractor for the oil and gas industry worldwide. It involves in the contract drilling of oil and gas wells. The company’s fleet consists of 14 semisubmersibles, 12 drillships, 45 jackups, and 2 submersibles. Noble Corporation also provides labor contract drilling services. The company was founded in 1921 and is based in Baar, Switzerland. (Yahoo Finance Profile)

Barchart technical indicators:

Transocean:

  • 32% Barchart technical buy signal
  • Trend Spotter buy signal
  • Above its 20, 50 and 100 day moving averages
  • 7 new highs and 3.46% in the last month
  • Relative Strength Index 55.75%
  • Barchart computes a technical support level at 49.92
  • Recently traded at 51.44 with a 50 day moving average of 46.20


Noble:

  • 8% Barchart technical buy signal
  • Trend Spotter hold signal
  • Below its 20 day moving average but above its 50 and 100 day moving averages
  • 9 new highs and up 1.17% in the last month
  • Relative Strength Index 51.31%
  • Barchart computes a technical support level at 37.75
  • Recently traded at 38.20 with a 50 day moving average of 35.29


Fundamental factors:

Transocean:

  • 33 Wall Street brokerage firms have assigned 44 analysts to follow the numbers on this stock
  • Analysts project revenue to increase by 12.80% this year and another 8.20% next year
  • Earnings are forecast to increase by 96.10% this year, an additional 58.60% next year and continue at an annual rate of 4.02% over the next 5 years
  • These consensus numbers result in analysts issuing 9 strong buy, 17 buy, 15 hold, 3 under perform and no sell recommendations
  • Analysts predict if the numbers are reliable investors could see an annual total return in the 21% - 25% range over the next 5 years
  • The stock has a 36.50 P/E ratio with a 5.83% dividend -- The dividend is around 40% of projected earnings
  • The company has a B++ financial strength Rating
  • They feel they are contractually indemnified from lawsuits
  • Most of the revenue problems stem from US well-control recertification problems the company thinks they will overcome


Noble:

  • 35 Wall Street brokerage firms assigned 42 analysts to follow the numbers
  • Revenue is projected to increase by 38.90% this year and 16.10% next year
  • Earnings are estimated to increase by 126.70% this year, 41.10% next year, and continue by an annual rate of 11.14% over the next 5 years
  • Consensus recommendations are 14 strong buy, 20 buy, 8 hold and no under perform or sell reports
  • Analysts also look for investors to receive a total annual return in the 21% - 25% range over the next 5 years
  • P/E ratio 30.52 with no dividend
  • Financial strength rank also B++


General investor interest on Motley Fool

Transocean:

  • 6226 readers voted 98% for the stock to beat the market
  • The more experienced All Stars voted 98% for he same result
  • Columnists and advisory services were 97% positive on the stock
  • Jim Cramer giving a thumbs down while HSBC, Barclays, FRB Capital and CapitalOne are positive


Noble:

  • 2309 readers voted 99% for the stock to beat the market
  • 99% of the voting All Stars voted for the same result
  • 96% of columnists and advisory services positive
  • Jim Cramer again being negative with Deutsche Securities, FBR Capital, Goldman Sachs and Morgan Keegan all positive


Summary: When it comes to comparing Transocean to Noble I'm gong to call it a draw. Analysts feel both stock will yield an annual total return of 21% - 25% over the next 5 years. Individual investors give both companies a 98% - 99% chance of beating the market, and better yet, Jim Cramer hates them both. If you can't decide on either, then buy both now and put in a stop loss at the lower 14 day turtle channel:

Transocean -

Noble -

For those of you wanting to see how some of the other oil field service stocks are doing over the last 6 month National Oilwell Varco (NOV) is up 47%, Baker Hughes (BHI) is up 4%, Schlumberger (SLB) is up 25% and Halliburton (HAL) is up 12%:

Source: Transocean Vs. Noble: Battle Of The Deepwater Rigs