Critical Survey: RPC (RES) and National Oilwell Varco (NOV)
RPC (NYSE: RES) and National Oilwell Varco (NYSE:NOV) are both mid-cap oils/energy companies, but which is the superior business? We will compare the two companies based on the strength of their analyst recommendations, profitability, valuation, institutional ownership, earnings, dividends and risk.
Institutional & Insider Ownership
38.2% of RPC shares are held by institutional investors. Comparatively, 90.3% of National Oilwell Varco shares are held by institutional investors. 73.5% of RPC shares are held by company insiders. Comparatively, 0.2% of National Oilwell Varco shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
This table compares RPC and National Oilwell Varco’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%|
Valuation and Earnings
This table compares RPC and National Oilwell Varco’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|RPC||$1.09 billion||4.70||$155.79 million||($0.06)||-392.93|
|National Oilwell Varco||$6.84 billion||1.97||-$440.00 million||($6.04)||-5.88|
RPC has higher revenue, but lower earnings than National Oilwell Varco. RPC 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.
RPC pays an annual dividend of $0.11 per share and has a dividend yield of 0.5%. National Oilwell Varco pays an annual dividend of $0.20 per share and has a dividend yield of 0.6%. RPC pays out -183.3% of its earnings in the form of a dividend. National Oilwell Varco pays out -3.3% 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. National Oilwell Varco has raised its dividend for 4 consecutive years. National Oilwell Varco is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Risk & Volatility
RPC has a beta of 1.12, suggesting that its share price is 12% more volatile than the S&P 500. Comparatively, National Oilwell Varco has a beta of 0.99, suggesting that its share price is 1% less volatile than the S&P 500.
This is a summary of recent ratings and price targets for RPC and National Oilwell Varco, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|National Oilwell Varco||3||14||6||0||2.13|
RPC currently has a consensus price target of $22.91, indicating a potential downside of 2.83%. National Oilwell Varco has a consensus price target of $38.32, indicating a potential upside of 7.81%. Given National Oilwell Varco’s higher possible upside, analysts clearly believe National Oilwell Varco is more favorable than RPC.
RPC beats National Oilwell Varco on 11 of the 16 factors compared between the two stocks.
RPC Company Profile
RPC, Inc. (RPC) is a holding company for several oilfield services companies. The Company provides a range of specialized oilfield services and equipment primarily to independent oil and gas companies engaged in the exploration, production and development of oil and gas properties throughout the United States, including the southwest, mid-continent, Gulf of Mexico, Rocky Mountain and Appalachian regions, and in selected international markets. The Company’s segments are Technical Services and Support Services. The Technical Services segment consists primarily of pressure pumping, downhole tools, coiled tubing, snubbing, nitrogen, well control, wireline and fishing. Its Support Services include all of the services that provide equipment for customers’ use on the well site without RPC personnel and services that are provided in support of customer operations off the well site, such as classroom and computer training, and other consulting services.
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.
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