Dresser-Rand Group (NYSE: DRC) and Tenaris (NYSE:TS) are both energy companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, dividends, profitabiliy, analyst recommendations, valuation, institutional ownership and earnings.

Earnings and Valuation

This table compares Dresser-Rand Group and Tenaris’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Dresser-Rand Group N/A N/A N/A N/A N/A
Tenaris $4.24 billion 3.94 $678.18 million $0.57 49.69

Tenaris has higher revenue and earnings than Dresser-Rand Group.

Insider & Institutional Ownership

18.7% of Tenaris shares are owned by institutional investors. 0.2% of Tenaris shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Dividends

Tenaris pays an annual dividend of $1.12 per share and has a dividend yield of 4.0%. Dresser-Rand Group does not pay a dividend. Tenaris pays out 196.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Dresser-Rand Group and Tenaris, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Dresser-Rand Group 0 0 0 0 N/A
Tenaris 1 3 7 0 2.55

Tenaris has a consensus target price of $35.17, indicating a potential upside of 24.18%. Given Tenaris’ higher possible upside, analysts plainly believe Tenaris is more favorable than Dresser-Rand Group.

Profitability

This table compares Dresser-Rand Group and Tenaris’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Dresser-Rand Group -4.64% -7.65% -2.86%
Tenaris 7.35% 2.00% 1.63%

Summary

Tenaris beats Dresser-Rand Group on 9 of the 10 factors compared between the two stocks.

About Dresser-Rand Group

Dresser-Rand Group Inc. is a supplier of custom-engineered rotating equipment solutions for long-life, critical applications in the oil, gas, chemical, petrochemical, process, power generation, military and other industries around the world. The Company operates through two segments: New Units and Aftermarket Parts and Services. New Units segment offers standardized equipment, such as engines and single stage steam turbines. The Company’s Aftermarket Parts and Services segment offer a range of aftermarket parts and services, including replacement parts, field service turnaround, service and repair, operation and maintenance contracts, rotor/spare parts storage, condition monitoring, controls retrofit, site/reliability audits, remote area energy solutions, equipment repair and re-rates, equipment installation, applied technology, long-term service agreements, special coatings/welding, product training, turnkey installation/project management and energy asset management.

About Tenaris

Tenaris S.A. is a holding company, which is a steel producer with production facilities in Mexico, Argentina, Colombia, United States and Guatemala. The Company supplies round steel bars and flat steel products for its pipes business. It operates through Tubes business segment. The Tubes segment includes the production and sale of both seamless and welded steel tubular products, and related services primarily for the oil and gas industry, principally oil country tubular goods (OCTG) used in drilling operations, and for other industrial applications with production processes that include in the transformation of steel into tubular products. It operates in geographical areas, such as North America, South America, Europe, Middle East and Africa, and Asia Pacific. Its products and services include OCTG, Premium Connections, Rig Direct, Offshore Line Pipe, Onshore Line Pipe, Hydrocarbon Processing, Power Generation, Sucker Rods, Coiled Tubing, Industrial and Mechanical, and Automotive.

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