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Transocean Ltd. (RIG) vs Valaris Limited (VAL)

Transocean Ltd. and Valaris Limited are both Oil & Gas Drilling companies. Transocean Ltd. and Valaris Limited are of similar size ($6.2B and $5.8B). Transocean Ltd. has negative trailing earnings, so its P/E is not meaningful; Valaris Limited trades at 6.3×. Transocean Ltd. grew revenue faster over the last twelve months: 8.54% against −13.2%. Valaris Limited has the higher net margin (44.0% vs −40.2%) and the higher return on invested capital (4.00% vs −4.91%). Across the 19 metrics below, Transocean Ltd. leads on 10 and Valaris Limited on 9.

Valuation

Metric RIG VAL Oil & Gas Drilling median
P/E n/m 6.34 —
P/S 1.53 2.77 1.45
P/B 0.75 1.84 1.40
Price to free cash flow 6.85 40.42 16.15
EV/EBITDA n/m 22.13 8.53
EV/Sales 2.58 4.20 2.37
Earnings yield (31.44%) 15.77% (2.00%)
Free cash flow yield 14.59% 2.47% 3.55%

Profitability

Metric RIG VAL Oil & Gas Drilling median
Gross margin 100.00% 24.78% 39.29%
Operating margin (24.24%) 11.27% 7.77%
Net margin (40.24%) 43.95% 0.00%
Free cash flow margin 22.34% 6.85% 4.46%
Return on equity (18.70%) 33.85% (2.78%)
Return on assets (10.05%) 18.88% (1.64%)
Return on invested capital (4.91%) 4.00% 2.29%

Growth

Metric RIG VAL Oil & Gas Drilling median
Revenue growth (TTM) 8.54% (13.22%) 4.14%
EPS growth (last fiscal year) (449.23%) 172.18% (46.88%)
Revenue growth, 5-year CAGR 4.70% 10.67% 13.40%
Net income growth, 5-year CAGR 0.00% 0.00% 0.00%

Health

Metric RIG VAL Oil & Gas Drilling median
Debt to equity 0.61 0.34 0.61
Current ratio 1.59 1.55 1.89
Net debt to EBITDA (2.86) 0.78 0.90

Dividend

Metric RIG VAL Oil & Gas Drilling median
Dividend yield — — —
Payout ratio — — —

Size

Metric RIG VAL Oil & Gas Drilling median
Market cap 6.15b 5.82b 3.77b

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