To answer the SDRL part of your question - dividends don't get paid from earnings, they get paid from cash. Depreciation (non-cash expense) is a big downward influence on earnings / EPS, but the company generates lots of cash. They are highly leveraged, so SDRL borrows heavily to build rigs, those rigs generate lots of cash, which gets returned to shareholders. Since the company is highly leveraged during a period of high rates, they get a bigger upswing.
Man of the replies below describe what a great company ESV is. That only adds to my confusion. Why is such a great company selling at a discount to its competitors' share price p/e's. ESV is conservatively run in its finances. Seadrill is highly leveraged. Yet the latter gets a much higher p/e and pays a higher dividend (a large share of earnings. It appears Seadrill is being rewarded for recklessness. Am I missing something?
Ensco earnings are so high (high dayrates and newer rigs (less maintenance costs)) it almost guarantees that P/E will be low. However, I wouldn't look to hard at P/E as a means of valuation. It is too easy to manipulate. If you look at Enterprise Value / EBITDA for both companies you'll see that ESV (8.25) seems to be a better deal than SDRL (12.40). You don't have to take my word for it either. Look up EV Multiple or Enterprise Value Ratio and see for yourself. Some other multiples...RIG (9.08), NE (8.74).
BTW...the lower the ratio the better...preferably below 7.5.
I understand what you are saying, and for value investors, a "low" PE is good, but ultimately it's like a moral victory, it's kind of hollow. I know for sure I wouldn't mind a much higher multiple, it means this stock wouldn't be in the 50's.