Financial Analysis: Weatherford International (NASDAQ:WFRD) & Subsea 7 (OTCMKTS:SUBCY)

Weatherford International (NASDAQ:WFRD) and Subsea 7 (OTCMKTS:SUBCY) are both mid-cap energy companies, but which is the superior stock? We will contrast the two businesses based on the strength of their dividends, analyst recommendations, profitability, risk, earnings, valuation and institutional ownership.

Risk & Volatility

Weatherford International has a beta of 0.77, suggesting that its share price is 23% less volatile than the S&P 500. Comparatively, Subsea 7 has a beta of 1.43, suggesting that its share price is 43% more volatile than the S&P 500.

Earnings and Valuation

This table compares Weatherford International and Subsea 7″s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Weatherford International	$5.51 billion	0.75	$506.00 million	$6.46	8.91
Subsea 7	$6.84 billion	0.86	$201.40 million	$0.89	21.97

Weatherford International has higher earnings, but lower revenue than Subsea 7. Weatherford International is trading at a lower price-to-earnings ratio than Subsea 7, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

97.2% of Weatherford International shares are owned by institutional investors. Comparatively, 0.0% of Subsea 7 shares are owned by institutional investors. 2.1% of Weatherford International shares are owned by insiders. Comparatively, 1.0% of Subsea 7 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.

Dividends

Weatherford International pays an annual dividend of $1.00 per share and has a dividend yield of 1.7%. Subsea 7 pays an annual dividend of $1.16 per share and has a dividend yield of 5.9%. Weatherford International pays out 15.5% of its earnings in the form of a dividend. Subsea 7 pays out 130.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Weatherford International and Subsea 7, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Weatherford International	0	1	7	0	2.88
Subsea 7	0	3	1	1	2.60

Weatherford International presently has a consensus price target of $97.6250, indicating a potential upside of 69.64%. Given Weatherford International’s stronger consensus rating and higher probable upside, research analysts plainly believe Weatherford International is more favorable than Subsea 7.

Profitability

This table compares Weatherford International and Subsea 7’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Weatherford International	9.35%	34.87%	9.37%
Subsea 7	3.80%	6.12%	3.35%

Summary

Weatherford International beats Subsea 7 on 11 of the 17 factors compared between the two stocks.

About Weatherford International

Weatherford International plc, an energy services company, provides equipment and services for the drilling, evaluation, completion, production, and intervention of oil, geothermal, and natural gas wells worldwide. The company operates through three segments: Drilling and Evaluation; Well Construction and Completions; and Production and Intervention. It offers artificial lift systems, including reciprocating rod, progressing cavity pumping, gas, hydraulic, plunger, and hybrid lift systems, as well as related automation and control systems; pressure pumping and reservoir stimulation services, such as acidizing, fracturing, cementing, and coiled-tubing intervention; and software, automation and flow measurement solutions. The company also provides safety, downhole reservoir monitoring, flow control, and multistage fracturing systems, as well as sand-control technologies, and production and isolation packers; liner hangers to suspend a casing string in high-temperature and high-pressure wells; cementing products, including plugs, float and stage equipment, and torque-and-drag reduction technology for zonal isolation; and pre-job planning and installation services. In addition, it offers directional drilling services, and logging and measurement services while drilling; services related to rotary-steerable systems, high temperature and high pressure sensors, drilling reamers, and circulation subs; rotating control devices and advanced automated control systems, as well as closed loop drilling, air drilling, managed-pressure drilling, and underbalanced drilling services; open-hole and cased-hole logging services; and intervention and remediation services. Further, it provides tubular handling, management, and connection services; and re-entry, fishing, and well abandonment services, as well as patented bottom hole, tubular-handling equipment, pressure-control equipment, and drill pipe and collars. The company was incorporated in 1972 and is based in Houston, Texas.

About Subsea 7

Subsea 7 S.A. delivers offshore projects and services for the energy industry worldwide. It provides subsea field development products and services, including project management, design and engineering, procurement, fabrication, survey, installation, and commissioning of production facilities on the seabed and the tie-back of its facilities to fixed or floating platforms or to the shore. The company also offers engineering, procurement, commissioning, and installation of subsea umbilicals, risers, and flowlines; inspection, repair, maintenance, remote intervention, and integrity management of subsea infrastructure services; conventional services comprising fabrication, installation, extension, and refurbishment of fixed and floating platforms and associated pipelines in shallow water; and hook-up services. In addition, it operates heavy lifting operations and heavy transportation services for renewables structures; and installs offshore wind turbine foundations, as well as engages in the decommissioning of redundant offshore structures. Further, the company provides remotely operated vehicles (ROVs) and tooling services to support exploration and production activities, as well as engineering and advisory services for customers in the oil and gas, renewables, and utilities industries. The company was incorporated in 1993 and is based in Luxembourg, Luxembourg.