Tesco Corporation (NASDAQ: TESO) and Natural Gas Services Group (NYSE:NGS) are both small-cap oils/energy companies, but which is the superior investment? We will contrast the two companies based on the strength of their analyst recommendations, profitabiliy, risk, institutional ownership, dividends, valuation and earnings.

Valuation & Earnings

This table compares Tesco Corporation and Natural Gas Services Group’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Tesco Corporation $136.03 million 1.51 -$39.49 million ($1.67) -2.63
Natural Gas Services Group $68.98 million 4.61 $27.05 million $0.26 94.62

Natural Gas Services Group has higher revenue, but lower earnings than Tesco Corporation. Tesco Corporation is trading at a lower price-to-earnings ratio than Natural Gas Services Group, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Tesco Corporation has a beta of 1.21, indicating that its share price is 21% more volatile than the S&P 500. Comparatively, Natural Gas Services Group has a beta of 1.23, indicating that its share price is 23% more volatile than the S&P 500.

Insider & Institutional Ownership

95.7% of Tesco Corporation shares are owned by institutional investors. Comparatively, 88.2% of Natural Gas Services Group shares are owned by institutional investors. 1.7% of Tesco Corporation shares are owned by insiders. Comparatively, 6.5% of Natural Gas Services Group shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Tesco Corporation and Natural Gas Services Group, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Tesco Corporation 1 2 3 0 2.33
Natural Gas Services Group 0 0 2 0 3.00

Tesco Corporation presently has a consensus target price of $7.00, suggesting a potential upside of 59.09%. Natural Gas Services Group has a consensus target price of $35.50, suggesting a potential upside of 44.31%. Given Tesco Corporation’s higher probable upside, equities analysts clearly believe Tesco Corporation is more favorable than Natural Gas Services Group.

Profitability

This table compares Tesco Corporation and Natural Gas Services Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Tesco Corporation -55.00% -18.65% -16.87%
Natural Gas Services Group 4.85% 1.42% 1.13%

Summary

Natural Gas Services Group beats Tesco Corporation on 9 of the 13 factors compared between the two stocks.

Tesco Corporation Company Profile

Tesco Corporation is a provider of technology-based solutions for drilling, servicing and completion of wells for the upstream energy industry. The Company’s operations consist of top drives and automated pipe handling equipment sales and rentals; aftermarket sales and services, and tubular services, including related products and accessories sales. Its segments include Products, Tubular Services, Research and Engineering, and Corporate and Other. The Products segment includes top drives and automated pipe handling equipment sales, rentals and aftermarket sales and services. The Tubular Services segment includes onshore and offshore tubular services and sales of related products and accessories. The Research and Engineering segment includes internal research, engineering, and development activities related to its products and tubular services. The Corporate and Other segment includes executive management and various global support and compliance functions.

Natural Gas Services Group Company Profile

Natural Gas Services Group, Inc. is a provider of small to medium horsepower compression equipment to the natural gas industry. The Company focuses primarily on the non-conventional natural gas and oil production business in the United States, such as coal bed methane, gas shale, tight gas and oil shales. The Company manufactures, fabricates and rents natural gases compressors that enhance the production of natural gas wells and provides maintenance services for its natural gas compressors. In addition, it sells custom fabricated natural gas compressors to meet customer specifications dictated by well pressures, production characteristics and particular applications. It also manufactures and sells flare systems for oil and gas plant and production facilities. The Company’s operating units include Gas Compressor Rental, Engineered Equipment Sales, Service and Maintenance, and Corporate.

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