National Oilwell Varco (NOV) versus Oceaneering International (OII) Critical Review
National Oilwell Varco (NYSE: NOV) and Oceaneering International (NYSE:OII) are both mid-cap oils/energy companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, risk, valuation, profitability, earnings, analyst recommendations and institutional ownership.
This is a breakdown of current ratings and price targets for National Oilwell Varco and Oceaneering International, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|National Oilwell Varco||3||14||6||0||2.13|
National Oilwell Varco presently has a consensus price target of $38.32, suggesting a potential upside of 20.68%. Oceaneering International has a consensus price target of $29.30, suggesting a potential upside of 20.48%. Given National Oilwell Varco’s higher possible upside, analysts plainly believe National Oilwell Varco is more favorable than Oceaneering International.
Insider and Institutional Ownership
90.3% of National Oilwell Varco shares are owned by institutional investors. Comparatively, 99.7% of Oceaneering International shares are owned by institutional investors. 0.2% of National Oilwell Varco shares are owned by company insiders. Comparatively, 0.9% of Oceaneering International shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
National Oilwell Varco pays an annual dividend of $0.20 per share and has a dividend yield of 0.6%. Oceaneering International pays an annual dividend of $0.60 per share and has a dividend yield of 2.5%. National Oilwell Varco pays out -3.3% of its earnings in the form of a dividend. Oceaneering International pays out -206.9% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Oceaneering International is clearly the better dividend stock, given its higher yield and lower payout ratio.
This table compares National Oilwell Varco and Oceaneering International’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|National Oilwell Varco||-33.24%||-2.12%||-1.41%|
Risk & Volatility
National Oilwell Varco has a beta of 0.99, indicating that its share price is 1% less volatile than the S&P 500. Comparatively, Oceaneering International has a beta of 1.67, indicating that its share price is 67% more volatile than the S&P 500.
Valuation and Earnings
This table compares National Oilwell Varco and Oceaneering International’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|National Oilwell Varco||$6.84 billion||1.76||-$440.00 million||($6.04)||-5.26|
|Oceaneering International||$2.00 billion||1.19||$236.08 million||($0.29)||-83.86|
Oceaneering International has higher revenue, but lower earnings than National Oilwell Varco. Oceaneering International is trading at a lower price-to-earnings ratio than National Oilwell Varco, indicating that it is currently the more affordable of the two stocks.
Oceaneering International beats National Oilwell Varco on 11 of the 14 factors compared between the two stocks.
National Oilwell Varco Company Profile
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.
Oceaneering International Company Profile
Oceaneering International, Inc. is an oilfield provider of engineered services and products, primarily to the offshore oil and gas industry, with a focus on deepwater applications. The Company’s business segments are contained within two businesses: services and products provided to the oil and gas industry (Oilfield) and all other services and products (Advanced Technologies). Its four business segments within the Oilfield business are Remotely Operated Vehicles (ROVs), Subsea Products, Subsea Projects and Asset Integrity. The services and products it provides to the oil and gas industry include remotely operated vehicles, specialty subsea hardware, engineering and project management, subsea intervention services, including manned diving, survey and positioning services and asset integrity and nondestructive testing services. The Company serves the defense, aerospace and commercial theme park industries.
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