DO  Diamond Offshore Drilling Inc.

Exchange

NYSE

Sector

Energy

Industry

Oil & Gas Production

Market Cap.

1.67B

Vuru Grade

49.00/100

Current Price

$12.15
-0.14 (-1.14%)

Growth Price

$27.00
Undervalued by 122.20%

Company Metrics

  • P/E 42.46
  • P/S 1.17
  • P/B 0.45
  • EPS -3.19
  • Cash ROIC -0.62%
  • Cash Ratio 0.46
  • Dividend 0.00 / 0.00 %
  • Avg. Vol. 3.01M
  • Shares 137.45M
  • Market Cap. 1.67B

Company Description

Diamond Offshore Drilling, Inc. operates as an offshore oil and gas drilling contractor worldwide. The company provides offshore drilling services in the deepwater, harsh environment, conventional semisubmersible, and jack-up markets to independent oil and gas companies and government-owned oil companies. As of December 31, 2009, it operated a fleet of 47 offshore rigs consisting of 32 semisubmers... more


Download 10 Years of Financial Statements:
Income Statement   Balance Sheet   Cash Flow

News

Diamond Offshore Drilling (DO) Q1 2017 Results - Earnings Call Transcript
Seeking Alpha - May 1, 2017
Good day, ladies and gentlemen, and welcome to the Diamond Offshore Incorporated First Quarter 2017 Earnings Conference Call.
Diamond Offshore Drilling Inc. Earnings Fall 73% In Q1 - Markets Insider
Diamond Offshore Announces First Quarter 2017 Results - PR Newswire (press release)
Earnings Reaction History: Diamond Offshore Drilling Inc, 30.0% Follow-Through ...
Nasdaq - May 1, 2017
Diamond Offshore Drilling Inc ( DO ) is due to issue its quarterly earnings report in the upcoming extended-hours session. Given its history, traders can expect light trading in the issue immediately following its quarterly earnings announcement ...
Big Show By Diamond Offshore Drilling, Inc. (DO), And Its Technical Chart
NY Stock News - May 23, 2017
Diamond Offshore Drilling, Inc. (DO) is now trading with a very clear set of technicals. Taken together they paint a very compelling picture of how investors and traders should be approaching DO.
Somewhat Favorable News Coverage Likely to Impact Diamond Offshore Drilling ...
The Cerbat Gem - May 28, 2017
Diamond Offshore Drilling logo Headlines about Diamond Offshore Drilling (NYSE:DO) have trended somewhat positive this week, according to AlphaOne Sentiment Analysis.
Nicholas Hoffman & Company LLC. Raises Stake in Diamond Offshore Drilling Inc (DO) - Sports Perspectives
Jefferies Group LLC Analysts Give Diamond Offshore Drilling Inc (DO) a $14.00 ... - BNB Daily (blog)
Which Way Traders Signposts Diamond Offshore Drilling, Inc. (DO), DXC ...
StockNewsJournal - May 19, 2017
ROI deals with the invested cash in the company and the return the investor realize on that money based on the net profit of the business.
Today Analysts Focus on Diamond Offshore Drilling, Inc. (DO), Glu Mobile Inc ...
StockNewsJournal - May 25, 2017
ROI deals with the invested cash in the company and the return the investor realize on that money based on the net profit of the business.
Diamond Offshore Drilling, Inc. (DO) has just broken (12.29) below ($ 13.91 ...
NY Stock News - May 26, 2017
Diamond Offshore Drilling, Inc. (DO) has built up a compelling picture over the last few trading sessions and both traders and analysts are now starting to take a keen look at the stock.
Diamond Offshore Drilling Inc (DO) Rating Reiterated by Barclays PLC - The Cerbat Gem
Diamond Offshore Drilling (DO) Reaches $12.76 1 Year Low, Cohen & Steers MLP ... - Key Gazette
What Diamond Offshore Drilling, Inc. (DO) Is Telling Investors Via Its ...
NY Stock News - May 19, 2017
Diamond Offshore Drilling, Inc. (DO) has created a compelling message for traders in the most recent trading. That message has grown stronger as the technical chart setup has developed into a more composite picture for the stock.
These 5 Offshore Drilling Stocks Sank 11% or More Last Month: Here's Why (and ...
Motley Fool - May 11, 2017
Transocean Ltd. (NYSE:RIG), ENSCO Plc. (NYSE:ESV), Diamond Offshore Drilling Inc. (NYSE:DO), Atwood Oceanic Inc. (NYSE:ATW), and Noble Corporation (NYSE:NE) all held up relatively well through the first third of the month, but then start to fall around ...
Earnings Clues on Diamond Offshore Drilling, Inc. (DO), Celadon Group, Inc ... - StockNewsJournal
Diamond Offshore Drilling, Inc. (DO) Is Grabbing Attention With Its Chart Setup
NY Stock News - May 11, 2017
Diamond Offshore Drilling, Inc. (DO) has been having a set of eventful trading activity and it is clear from an examination of the charts that traders are now fully aware of the company's key metrics.
Growth Rate Assumed by Market

We did a reverse valuation to calculate the growth rate the market is assuming for DO to be considered fairly valued at its current market price. It's useful to compare this to the growth rate we're assuming for the Growth Price.

Future Free Cash Flow Growth Rate

This is the annual growth rate we've applied to calculate DO's Free Cash Flow for the next 10 years. To calculate it, we looked at several time periods of the last 10 years. Feel free to adjust it, but we limit the initial growth rate to 20% and slow it down over the years. Otherwise, long-term sustainability issues come into play.

Discount Rate

The discount rate is the annual rate of return an investor requires to take the risk of investing in a single stock. To account for that risk, this should be above 8-10%, as this is the avg. annual rate of return for the S&P500 over the past 100 years.

$12.15 Current Price

$27.00 Growth Price (DCF)

Undervalued by 122.20%


Growth Rate Assumed by Market: -407.20%


Future Free Cash Flow Growth Rate: 0.0%


Discount Rate: 15.0%


DO's most recent year of (normalized) free cash flow is negative. This is the base number for forward projections. This means that if you increase the growth rate, the amount of negative FCF grows, thereby decreasing the price.

Show Free Cash Flow numbers

$55.93 Book Price

Undervalued by 360.37%


Very Poor Cash Return on Invested Capital over the past 5 years

DO has failed to generate positive returns on its investments in buildings, projects and equipment. This could be due to poor management, lack of an economic moat or the capital intensive nature of the business.

DO has lost $0.62 of cash for every $100 invested.
Figures in USD. Fiscal year ends in December
20122013201420152016
Free Cash Flow 609.23M 108.39M -1.04B -94.23M -6.12M
divided by
Invested Capital 5.26B 5.55B 6.91B 6.41B 5.88B
Cash ROIC 11.57% 1.95% -15.04% -1.47% -0.10%

Poor Return on Equity over the past 5 years

DO has shown an inability to deliver strong results for shareholders. This could be due to poor management, DO operating in a highly competitive industry, or having a weak business in general.

DO has only generated $3.93 of Earnings for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in December
20122013201420152016
Net Income 720.48M 548.69M 387.01M -274.29M -372.50M
divided by
Stockholders' Equity 4.58B 4.64B 4.45B 4.11B 3.75B
Return on Equity 15.74% 11.83% 8.69% -6.67% -9.93%

Good Business Performance over the past 10 years

It's likely DO has been unable to maintain profitability in tough economic times, making it a somewhat cyclical business. The other possibility is DO has expended significant capital on items such as property, plant and equipment in specific years. Look for correlations.

DO has created positive free cash flow for 7 or 8 of the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Free Cash Flow 561.22M 952.83M 1.10B 848.06M 645.35M 609.23M 108.39M -1.04B -94.23M -6.12M

Good Balance Sheet

DO's Total Assets double Total Liabilities. Its financial position is adequate. Remember to check Shareholders' Equity to see if it's stable or growing. It's one of the best measures of whether a company is creating value for shareholders.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Cash 639.26M 736.64M 777.27M 1.08B 1.24B 1.49B 2.10B 249.66M 130.55M 156.27M
Current Assets 1.27B 1.47B 1.72B 1.86B 1.99B 2.13B 2.72B 899.06M 669.60M 505.81M
Total Assets 4.34B 4.94B 6.26B 6.73B 6.96B 7.24B 8.39B 8.02B 7.16B 6.37B
Current Liabilities 453.01M 509.09M 413.48M 626.29M 427.29M 485.55M 745.58M 856.65M 625.72M 340.50M
Total Liabilities 1.46B 1.59B 2.63B 2.87B 2.63B 2.66B 3.75B 3.57B 3.05B 2.62B
Stockholder' Equity 2.88B 3.35B 3.63B 3.86B 4.33B 4.58B 4.64B 4.45B 4.11B 3.75B
Current Ratio 2.79 2.88 4.17 2.98 4.66 4.39 3.65 1.05 1.07 1.49
TL-to-TA 0.34 0.32 0.42 0.43 0.38 0.37 0.45 0.45 0.43 0.41

Consistent Reinvestment of Profits over the past 10 years

DO has consistently retained profits. This may put DO in a strong position to invest for the future, by buying new machinery, investing in R&D or a number of other options. By effectively using these earnings, DO can greatly improve their long-term economic picture.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Retained Earnings 1.16B 1.62B 1.78B 2.00B 2.47B 2.70B 2.76B 2.66B 2.32B 1.95B
Retained Earnings Growth - 39.47% 9.95% 12.52% 23.68% 9.33% 2.15% -3.59% -12.88% -16.06%

Inconsistent Net Profit Margins over the past 10 years

DO potentially has a competitive advantage, however inconsistent profit margins are a cause for concern. Look at reasons for this inconsistency to determine the likelihood of future sustainability.

$18.76 of every $100 of Revenue have been pure profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Net Income 846.54M 1.31B 1.38B 955.46M 962.54M 720.48M 548.69M 387.01M -274.29M -372.50M
divided by
Revenue 2.57B 3.54B 3.63B 3.32B 3.32B 2.99B 2.92B 2.81B 2.42B 1.60B
Net Profit Margin 32.97% 36.99% 37.90% 28.75% 28.97% 24.12% 18.79% 13.75% -11.34% -23.28%

Strong Pricing Power over the past 10 years

DO has maintained substantial gross margins, suggesting that they have been able to set prices without consideration of the cost of goods sold. This potentially leaves flexibility in inflationary environments to raise prices on consumers and maintain profitability.

$57.36 of every $100 worth of sales have been Gross Profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Gross Profit 1.50B 2.29B 2.41B 1.84B 3.32B 1.40B 1.27B 1.21B 1.13B 770.11M
divided by
Revenue 2.57B 3.54B 3.63B 3.32B 3.32B 2.99B 2.92B 2.81B 2.42B 1.60B
Gross Margin 58.56% 64.70% 66.30% 55.39% 100.00% 46.89% 43.59% 43.17% 46.85% 48.12%

High Capital Intensity over the past 10 years

DO spends large amounts of capital buying new equipment or investing in new facilities to stay competitive. Over the long term, those costs may have to be fuelled by debt. Look at the growth of Shareholders' Equity to see if this strategy is having a positive or negative impact.

135.05% of Profits are being spent on Capital Expenditures, like Property, Plant, & Equipment, required to run the business.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Capital Expenditure 647.10M 666.86M 412.44M 434.26M 774.76M 702.04M 957.60M 2.03B 830.66M 652.67M
divided by
Net Income 846.54M 1.31B 1.38B 955.46M 962.54M 720.48M 548.69M 387.01M -274.29M -372.50M
Capital Expenditure Ratio 76.44% 50.87% 29.97% 45.45% 80.49% 97.44% 174.53% 525.25% -302.84% -175.21%

Very Strong Dividend History over the past 10 years

DO has consistently distributed a dividend for at least the past 10 years. Such a long dividend history suggests DO is very established in its market and that its dividend distribution is likely to continue for a significant period of time.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Dividend Paid 796.29M 852.15M 1.12B 733.66M 490.06M 490.25M 490.33M 486.24M 69.43M 408,000.00
divided by
Shares Outstanding 138.95M 139.07M 139.10M 139.07M 139.04M 139.05M 139.06M 137.52M 137.16M 137.17M
Dividend Paid Per Share 5.73 6.13 8.02 5.28 3.52 3.53 3.53 3.54 0.51 0.00
Price at Year End 107.01 47.67 87.26 61.89 54.50 67.23 56.37 38.08 20.85 17.70
Dividend Yield 5.36% 12.85% 9.19% 8.52% 6.47% 5.24% 6.25% 9.28% 2.43% 0.02%

History of Stock Buybacks over the past 10 years

DO has some history of delivering increased value for shareholders in the form of stock buybacks. These have helped improve financial metrics and increase each shareholders' relative ownership stake in the company, due to fewer shares outstanding and holding the same number of shares.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Shares Outstanding 138.95M 139.07M 139.10M 139.07M 139.04M 139.05M 139.06M 137.52M 137.16M 137.17M
Stock Bought Back - -0.09% -0.02% 0.02% 0.02% -0.01% -0.01% 1.12% 0.27% -0.01%
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Discussion
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1
Posted by tmuscat27  (on March 28, 2012)
does anyone know where I can find past ten year p/e for canadian companies to find the signature p/e
tx tm
1
Posted by tmuscat27  (on March 26, 2012)
dividend pay out is 50% which is a bit high but not outragious.they do not have a lot of debt so I think it is still good.
tm
1
Posted by VuruSupport  (on March 26, 2012)
Hey TM,

I think you're meaning to reply to mcruscetti down below? If so, click the "Reply" link below their comment and post your comment there. This way they'll be notified of your response.

Hope that helps.

Victoria
Vuru Support Team
1
Posted by mcruscetti  (on March 22, 2012)
The biggest issue for this company is that it looks like it's paid way too much in dividends in the past couple of years. It's paid $23 a share in dividends between 2008 and 2011 - a total of $3.2 billion. Whereas, they should have focused on buying new equipment. They 28% less on new equipment in this time.

Wonder if they'll be able to stay competitive