Analyzing Cactus (NYSE:WHD) & National Fuel Gas (NYSE:NFG)

Cactus (NYSE:WHD) and National Fuel Gas (NYSE:NFG) are both mid-cap energy companies, but which is the superior stock? We will compare the two businesses based on the strength of their valuation, institutional ownership, profitability, analyst recommendations, earnings, dividends and risk.

Institutional and Insider Ownership

85.1% of Cactus shares are owned by institutional investors. Comparatively, 74.0% of National Fuel Gas shares are owned by institutional investors. 13.8% of Cactus shares are owned by insiders. Comparatively, 1.4% of National Fuel Gas shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares Cactus and National Fuel Gas’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Cactus	16.78%	18.99%	13.76%
National Fuel Gas	1.91%	18.55%	6.34%

Valuation and Earnings

This table compares Cactus and National Fuel Gas”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cactus	$1.13 billion	3.02	$185.41 million	$2.81	15.20
National Fuel Gas	$1.94 billion	4.10	$77.51 million	$0.43	205.37

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

Dividends

Cactus pays an annual dividend of $0.52 per share and has a dividend yield of 1.2%. National Fuel Gas pays an annual dividend of $2.14 per share and has a dividend yield of 2.4%. Cactus pays out 18.5% of its earnings in the form of a dividend. National Fuel Gas pays out 497.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Cactus has raised its dividend for 4 consecutive years and National Fuel Gas has raised its dividend for 55 consecutive years. National Fuel Gas is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility & Risk

Cactus has a beta of 1.48, meaning that its stock price is 48% more volatile than the S&P 500. Comparatively, National Fuel Gas has a beta of 0.62, meaning that its stock price is 38% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and price targets for Cactus and National Fuel Gas, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cactus	1	1	2	0	2.25
National Fuel Gas	0	1	2	1	3.00

Cactus presently has a consensus target price of $52.00, indicating a potential upside of 21.72%. National Fuel Gas has a consensus target price of $95.33, indicating a potential upside of 7.96%. Given Cactus’ higher probable upside, equities research analysts plainly believe Cactus is more favorable than National Fuel Gas.

Summary

Cactus beats National Fuel Gas on 10 of the 17 factors compared between the two stocks.

About Cactus

Cactus, Inc., together with its subsidiaries, designs, manufactures, sells, and leases pressure control and spoolable pipes in the United States, Australia, Canada, the Middle East, and internationally. It operates through two segments, Pressure Control and Spoolable Technologies. The Pressure Control segment designs, manufactures, sells, and rents a range of wellhead and pressure control equipment under the Cactus Wellhead brand name through service centers. Its products are sold and rented primarily for onshore unconventional oil and gas wells for drilling, completion, and production phases of the wells. This segment also provides field services to install, maintain, and handle the equipment. The Spoolable Technologies segment designs, manufactures, and sells spoolable pipes and associated end fittings under the FlexSteel brand name. Its products are primarily used to transport oil, gas, and other liquids. This segment also provides field services and rental items through service centers and pipe yards, as well as offers equipment and services internationally. In addition, the company offers repair and refurbishment services. Cactus, Inc. was founded in 2011 and is headquartered in Houston, Texas.

About National Fuel Gas

National Fuel Gas Company operates as a diversified energy company. It operates through four segments: Exploration and Production, Pipeline and Storage, Gathering, and Utility. The Exploration and Production segment explores for, develops, and produces natural gas and oil. The Pipeline and Storage segment provides interstate natural gas transportation services through an integrated gas pipeline system in Pennsylvania and New York; and owns and operates underground natural gas storage fields. This segment also transports natural gas for National Fuel Gas Distribution Corporation, as well as for other utilities, industrial companies, and power producers in New York State. The Gathering segment builds, owns, and operates natural gas processing and pipeline gathering facilities in the Appalachian region, as well as provides gathering services to Seneca. The Utility segment sells natural gas or provides natural gas utility services to various customers in Buffalo, Niagara Falls, and Jamestown, New York; and Erie and Sharon, Pennsylvania. National Fuel Gas Company was incorporated in 1902 and is headquartered in Williamsville, New York.