McDermott International (NYSE: MDR) and Tetra Technologies (NYSE:TTI) are both oils/energy companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, risk, valuation, institutional ownership, earnings, analyst recommendations and profitability.

Profitability

This table compares McDermott International and Tetra Technologies’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
McDermott International 5.25% 9.56% 4.80%
Tetra Technologies -5.47% -6.89% -2.05%

Institutional and Insider Ownership

86.1% of McDermott International shares are owned by institutional investors. Comparatively, 90.6% of Tetra Technologies shares are owned by institutional investors. 1.3% of McDermott International shares are owned by company insiders. Comparatively, 3.6% of Tetra Technologies shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for McDermott International and Tetra Technologies, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
McDermott International 0 4 3 0 2.43
Tetra Technologies 0 4 9 0 2.69

McDermott International presently has a consensus target price of $7.93, indicating a potential upside of 9.01%. Tetra Technologies has a consensus target price of $4.78, indicating a potential upside of 17.97%. Given Tetra Technologies’ stronger consensus rating and higher probable upside, analysts clearly believe Tetra Technologies is more favorable than McDermott International.

Risk & Volatility

McDermott International has a beta of 1.35, meaning that its share price is 35% more volatile than the S&P 500. Comparatively, Tetra Technologies has a beta of 0.98, meaning that its share price is 2% less volatile than the S&P 500.

Earnings and Valuation

This table compares McDermott International and Tetra Technologies’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
McDermott International $2.64 billion 0.78 $34.11 million $0.54 13.46
Tetra Technologies $694.76 million 0.68 -$161.46 million ($0.42) -9.64

McDermott International has higher revenue and earnings than Tetra Technologies. Tetra Technologies is trading at a lower price-to-earnings ratio than McDermott International, indicating that it is currently the more affordable of the two stocks.

Summary

McDermott International beats Tetra Technologies on 8 of the 13 factors compared between the two stocks.

About McDermott International

McDermott International, Inc. is a provider of integrated engineering, procurement, construction and installation (EPCI), front-end engineering and design (FEED) and module fabrication services for upstream field developments across the world. The Company delivers fixed and floating production facilities, pipeline installations and subsea systems from concept to commissioning for offshore and subsea oil and gas projects. It operates through three segments: the Americas, Europe and Africa (AEA), the Middle East (MEA) and Asia (ASA). As of December 31, 2016, operated in approximately 20 countries across the Americas, Europe, Africa, the Middle East, Asia and Australia, its integrated resources include a diversified fleet of marine vessels, fabrication facilities and engineering offices. It support its activities with project management and procurement services, while utilizing its fully integrated capabilities in both shallow water and deepwater construction.

About Tetra Technologies

TETRA Technologies, Inc. is an oil and gas services company. The Company focuses on completion fluids and associated products and services, water management, production well testing, offshore rig cooling, compression services and equipment, and offshore services, such as decommissioning and diving. It is composed of five segments organized into four divisions: Fluids, Production Testing, Compression and Offshore. The Fluids division manufactures and markets clear brine fluids, additives and associated products and services to the oil and gas industry. Its Production Testing division provides frac flowback services, production well testing services, offshore rig cooling and other associated services in various oil and gas producing regions. The Compression division provides compression services and equipment for natural gas and oil production, gathering, transportation, processing and storage. The Offshore division consists of two operating segments: Offshore Services and Maritech.

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