National Oilwell Varco (NYSE: NOV) and Schlumberger N.V. (NYSE:SLB) are both large-cap oils/energy companies, but which is the superior stock? We will contrast the two businesses based on the strength of their earnings, profitabiliy, valuation, risk, dividends, analyst recommendations and institutional ownership.

Volatility and Risk

National Oilwell Varco has a beta of 1.01, meaning that its share price is 1% more volatile than the S&P 500. Comparatively, Schlumberger N.V. has a beta of 1.02, meaning that its share price is 2% more volatile than the S&P 500.

Profitability

This table compares National Oilwell Varco and Schlumberger N.V.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
National Oilwell Varco -35.50% -2.44% -1.64%
Schlumberger N.V. 0.62% 3.80% 2.02%

Institutional & Insider Ownership

91.4% of National Oilwell Varco shares are owned by institutional investors. Comparatively, 79.2% of Schlumberger N.V. shares are owned by institutional investors. 0.6% of National Oilwell Varco shares are owned by insiders. Comparatively, 0.4% of Schlumberger N.V. shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Dividends

National Oilwell Varco pays an annual dividend of $0.20 per share and has a dividend yield of 0.6%. Schlumberger N.V. pays an annual dividend of $2.00 per share and has a dividend yield of 3.0%. National Oilwell Varco pays out -3.1% of its earnings in the form of a dividend. Schlumberger N.V. pays out 1,538.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Schlumberger N.V. has raised its dividend for 6 consecutive years. Schlumberger N.V. is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings & Valuation

This table compares National Oilwell Varco and Schlumberger N.V.’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
National Oilwell Varco $6.80 billion 1.85 -$644.00 million ($6.42) -5.17
Schlumberger N.V. $28.48 billion 3.23 $6.28 billion $0.13 510.96

Schlumberger N.V. has higher revenue and earnings than National Oilwell Varco. National Oilwell Varco is trading at a lower price-to-earnings ratio than Schlumberger N.V., indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current recommendations and price targets for National Oilwell Varco and Schlumberger N.V., as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
National Oilwell Varco 2 16 5 0 2.13
Schlumberger N.V. 0 8 20 1 2.76

National Oilwell Varco currently has a consensus price target of $38.78, indicating a potential upside of 16.87%. Schlumberger N.V. has a consensus price target of $87.04, indicating a potential upside of 31.04%. Given Schlumberger N.V.’s stronger consensus rating and higher probable upside, analysts plainly believe Schlumberger N.V. is more favorable than National Oilwell Varco.

Summary

Schlumberger N.V. beats National Oilwell Varco on 14 of the 17 factors compared between the two stocks.

About National Oilwell Varco

National Oilwell Varco, Inc. is an oilfield equipment manufacturer and technology provider. The Company operates through four segments: Rig Systems, Rig Aftermarket, Wellbore Technologies and Completion & Production Solutions. The Rig Systems segment makes and supports the capital equipment and integrated systems needed to drill oil and gas wells on land and offshore. The Rig Systems segment designs, manufactures and sells land rigs, offshore drilling equipment packages, and drilling rig components. The Rig Aftermarket segment provides aftermarket products and services to support a large installed base of land and offshore rigs, and drilling rig components manufactured by the Company’s Rig Systems segment. The Wellbore Technologies segment designs, manufactures, rents and sells a range of equipment and technologies used to perform drilling operations. The Completion & Production Solutions segment integrates technologies for well completions and oil and gas production.

About Schlumberger N.V.

Schlumberger N.V. provides technology for reservoir characterization, drilling, production and processing to the oil and gas industry. The Company’s segments include Reservoir Characterization Group, Drilling Group, Production Group and Cameron Group. The Reservoir Characterization Group consists of the principal technologies involved in finding and defining hydrocarbon resources. The Drilling Group consists of the principal technologies involved in the drilling and positioning of oil and gas wells. The Production Group consists of the principal technologies involved in the lifetime production of oil and gas reservoirs and includes Well Services, Completions, Artificial Lift, Integrated Production Services (IPS) and Schlumberger Production Management (SPM). The Cameron Group consists of the principal technologies involved in pressure and flow control for drilling and intervention rigs, oil and gas wells and production facilities.

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