Financial Analysis: Tenaris (NYSE:TS) vs. MRC Global (NYSE:MRC)

MRC Global (NYSE:MRC) and Tenaris (NYSE:TS) are both industrials companies, but which is the better stock? We will contrast the two companies based on the strength of their risk, dividends, valuation, institutional ownership, profitability, earnings and analyst recommendations.

Risk & Volatility

MRC Global has a beta of 1.61, meaning that its stock price is 61% more volatile than the S&P 500. Comparatively, Tenaris has a beta of 1.27, meaning that its stock price is 27% more volatile than the S&P 500.

Profitability

This table compares MRC Global and Tenaris’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
MRC Global	0.47%	12.82%	3.96%
Tenaris	15.05%	10.54%	8.67%

Valuation and Earnings

This table compares MRC Global and Tenaris”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
MRC Global	$3.01 billion	0.37	$55.00 million	($0.11)	-117.16
Tenaris	$12.52 billion	1.69	$2.04 billion	$3.28	11.11

Tenaris has higher revenue and earnings than MRC Global. MRC Global is trading at a lower price-to-earnings ratio than Tenaris, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for MRC Global and Tenaris, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MRC Global	0	0	3	0	3.00
Tenaris	2	1	5	0	2.38

MRC Global currently has a consensus target price of $15.00, indicating a potential upside of 16.39%. Tenaris has a consensus target price of $44.00, indicating a potential upside of 20.73%. Given Tenaris’ higher possible upside, analysts plainly believe Tenaris is more favorable than MRC Global.

Insider and Institutional Ownership

95.0% of MRC Global shares are owned by institutional investors. Comparatively, 10.5% of Tenaris shares are owned by institutional investors. 2.0% of MRC Global shares are owned by insiders. Comparatively, 0.2% of Tenaris shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

Tenaris beats MRC Global on 9 of the 14 factors compared between the two stocks.

About MRC Global

MRC Global Inc., through its subsidiaries, distributes pipes, valves, fittings, and other infrastructure products and services in the United States, Canada, and internationally. It offers ball, butterfly, gate, globe, check, diaphragm, needle, and plug valves; other products, such as lined corrosion resistant piping systems, control valves, valve automation, and top work components; and valve modification services, including valve control extensions, welding, hydrotesting, painting, coating, x-raying, and actuation assembly. The company also provides carbon steel fittings and flanges comprising carbon weld fittings, flanges, and piping components; stainless steel, alloy and corrosion resistant pipes, tubing, fittings, and flanges; and carbon line pipes. In addition, it offers natural gas distribution products, including risers, meters, polyethylene pipes and fittings, and various other components and industrial supplies; oilfield and industrial supplies and completion equipment, such as high density polyethylene pipes, fittings, and rods; and specialized production equipment comprising tanks and separators. Further, the company provides various services under the ValidTorque and FastTrack names. Its products are used in the construction, maintenance, repair, and overhaul of equipment used in extreme operating conditions, including high pressure, high/low temperature, and high corrosive and abrasive environments. The company was formerly known as McJunkin Red Man Holding Corporation and changed its name to MRC Global Inc. in January 2012. MRC Global Inc. was founded in 1921 and is headquartered in Houston, Texas.

About Tenaris

Tenaris S.A., together with its subsidiaries, produces and sells seamless and welded steel tubular products and related services for the oil and gas industry, and other industrial applications. The company offers steel casings, tubing products, mechanical and structural pipes, line pipes, cold-drawn pipes, and premium joints and couplings; and coiled tubing products for oil and gas drilling and workovers, and subsea pipelines. It also manufactures sucker rods used in oil extraction activities and tubes for plumbing and construction applications; and offers oilfield/hydraulic fracturing services and energy and raw materials, and financial services. The company operates in North America, South America, Europe, the Middle East and Africa, and the Asia Pacific. Tenaris S.A. was founded in 2001 and is based in Luxembourg. Tenaris S.A. operates as a subsidiary of Techint Holdings S.à r.l.