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Ensco: The 5th-Best Performing Stock in Offshore Drilling

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Ensco’s YTD performance

Among offshore drilling stocks, Ensco (ESV) is the fifth-best-performing stock in 2017. It had a YTD (year-to-date) return of -42.5% as of December 12, 2017. Its returns were behind Transocean (RIG), Diamond Offshore Drilling (DO), Rowan Companies (RDC), and Noble Corporation (NE), which had YTD returns of -32.2%, -3.5%, -22.6%, and -28%, respectively.

Ensco stock significantly underperformed the broad equity market indexes. The Dow Jones Industrial Average (DJIA-INDEX) has risen 23% YTD as of December 12, 2017. The SPDR S&P 500 ETF (SPY) has risen 18.7% in the same period. Ensco has underperformed the OFS industry ETF since December 30, 2016. The Energy Select Sector SPDR ETF (XLE) has fallen 8%. The VanEck Vectors Oil Services ETF (OIH) has fallen 25.7%.

Although Ensco has had a negative YTD return, the stock has performed well since mid-September 2017. As of December 12, 2017, the stock has risen 20.6% in last three months.

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Performance in 9M17

In the first nine months of 2017, Ensco had revenue of $1.4 billion. That was 39% lower than $2.3 billion in the same period last year. In October, Atwood Oceanics merged with Ensco in an all-stock acquisition. After the merger, Ensco’s backlog went to $3.2 billion, and it ended up with the largest fleet of premium jackups. Its fleet consists of 26 floaters and 37 jackups. To know more about the merger, be sure to read Market Realist’s Updates on Ensco’s Acquisition of Atwood Oceanics. The company didn’t have any debt maturities until the second quarter of 2019 and less than $1 billion of debt maturing before 2024.

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