Head to Head Comparison: National-Oilwell Varco (NOV) & Franks International (FI)

National-Oilwell Varco (NYSE: NOV) and Franks International (NYSE:FI) are both oils/energy companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, earnings, analyst recommendations, risk, profitability, dividends and valuation.

Profitability

This table compares National-Oilwell Varco and Franks International’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
National-Oilwell Varco -13.33% -1.41% -0.94%
Franks International -26.21% -9.25% -7.80%

Volatility and Risk

National-Oilwell Varco has a beta of 0.95, suggesting that its share price is 5% less volatile than the S&P 500. Comparatively, Franks International has a beta of 1.1, suggesting that its share price is 10% more volatile than the S&P 500.

Earnings & Valuation

This table compares National-Oilwell Varco and Franks International’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
National-Oilwell Varco $7.25 billion 1.99 -$2.41 billion ($2.49) -15.25
Franks International $487.53 million 3.39 -$135.33 million ($0.53) -13.96

Franks International has lower revenue, but higher earnings than National-Oilwell Varco. National-Oilwell Varco is trading at a lower price-to-earnings ratio than Franks International, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent ratings for National-Oilwell Varco and Franks International, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
National-Oilwell Varco 3 17 6 0 2.12
Franks International 3 9 1 0 1.85

National-Oilwell Varco presently has a consensus target price of $37.76, indicating a potential downside of 0.57%. Franks International has a consensus target price of $7.61, indicating a potential upside of 2.85%. Given Franks International’s higher possible upside, analysts clearly believe Franks International is more favorable than National-Oilwell Varco.

Institutional and Insider Ownership

92.4% of National-Oilwell Varco shares are held by institutional investors. Comparatively, 31.5% of Franks International shares are held by institutional investors. 0.2% of National-Oilwell Varco shares are held by insiders. Comparatively, 77.9% of Franks International shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Dividends

National-Oilwell Varco pays an annual dividend of $0.20 per share and has a dividend yield of 0.5%. Franks International pays an annual dividend of $0.30 per share and has a dividend yield of 4.1%. National-Oilwell Varco pays out -8.0% of its earnings in the form of a dividend. Franks International pays out -56.6% 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. Franks International is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Franks International beats National-Oilwell Varco on 9 of the 16 factors compared between the two stocks.

About National-Oilwell Varco

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.

About Franks International

Frank’s International N.V. (FINV) is a provider of engineered tubular services, tubular fabrication and specialty well construction and well intervention solutions to the oil and gas industry. The Company operates through four business segments: International Services, U. S. Services, Tubular Sales and Blackhawk. As of December 31, 2016, the International Services segment provided tubular services in international offshore markets and in several onshore international regions in approximately 60 countries on six continents. The U.S. Services segment provides tubular services. The Blackhawk segment provides well construction and well intervention rental equipment, services and products, in addition to the cementing tool expertise, in the United States and Mexican Gulf of Mexico, onshore United States and other select international locations.

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