Reviewing Valaris (NYSE:VAL) and Smart Sand (NASDAQ:SND)

Smart Sand (NASDAQ:SND) and Valaris (NYSE:VAL) are both energy companies, but which is the better stock? We will contrast the two businesses based on the strength of their dividends, institutional ownership, valuation, earnings, analyst recommendations, profitability and risk.

Institutional & Insider Ownership

35.2% of Smart Sand shares are held by institutional investors. Comparatively, 96.7% of Valaris shares are held by institutional investors. 33.5% of Smart Sand shares are held by company insiders. Comparatively, 0.8% of Valaris shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Risk & Volatility

Smart Sand has a beta of 0.36, meaning that its share price is 64% less volatile than the S&P 500. Comparatively, Valaris has a beta of 1.04, meaning that its share price is 4% more volatile than the S&P 500.

Valuation & Earnings

This table compares Smart Sand and Valaris”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Smart Sand	$330.15 million	0.68	$1.35 million	$0.26	20.31
Valaris	$2.37 billion	2.45	$982.80 million	$13.39	6.25

Valaris has higher revenue and earnings than Smart Sand. Valaris is trading at a lower price-to-earnings ratio than Smart Sand, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent ratings for Smart Sand and Valaris, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Smart Sand	0	0	1	0	3.00
Valaris	1	6	0	0	1.86

Valaris has a consensus target price of $67.80, indicating a potential downside of 18.96%. Given Valaris’ higher possible upside, analysts clearly believe Valaris is more favorable than Smart Sand.

Profitability

This table compares Smart Sand and Valaris’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Smart Sand	2.71%	4.41%	3.07%
Valaris	43.95%	9.25%	5.35%

Summary

Valaris beats Smart Sand on 10 of the 14 factors compared between the two stocks.

About Smart Sand

Smart Sand, Inc., an integrated frac and industrial sand supply and services company, engages in the excavation, processing, and sale of sands or proppant for use in hydraulic fracturing operations in the oil and gas industry in the United States. It also provides proppant logistics services; and wellsite storage solutions through SmartSystems products and services. The company sells its products primarily to oil and natural gas exploration and production companies, oilfield service companies, and industrial manufacturers. Smart Sand, Inc. was incorporated in 2011 and is headquartered in Spring, Texas.

About Valaris

Valaris Limited, together with its subsidiaries, provides offshore contract drilling services Gulf of Mexico, South America, North Sea, the Middle East, Africa, and the Asia Pacific. The company operates through four segments: Floaters, Jackups, ARO, and Other. It owns an offshore drilling rig fleet, which include drillships, dynamically positioned semisubmersible rigs, moored semisubmersible rig, and jackup rigs. It serves international, government-owned, and independent oil and gas. Valaris Limited was founded in 1975 and is based in Hamilton, Bermuda.