Contrasting Dril-Quip (DRQ) & National-Oilwell Varco (NOV)

Dril-Quip (NYSE: DRQ) and National-Oilwell Varco (NYSE:NOV) are both oils/energy companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, institutional ownership, dividends, earnings, profitability, valuation and risk.

Dividends

National-Oilwell Varco pays an annual dividend of $0.20 per share and has a dividend yield of 0.5%. Dril-Quip does not pay a dividend. National-Oilwell Varco pays out -47.6% of its earnings in the form of a dividend.

Volatility & Risk

Dril-Quip has a beta of 0.8, meaning that its stock price is 20% less volatile than the S&P 500. Comparatively, National-Oilwell Varco has a beta of 0.81, meaning that its stock price is 19% less volatile than the S&P 500.

Earnings & Valuation

This table compares Dril-Quip and National-Oilwell Varco’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Dril-Quip $455.47 million 4.06 -$100.63 million $0.26 186.54
National-Oilwell Varco $7.30 billion 2.17 -$237.00 million ($0.42) -98.76

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

Analyst Ratings

This is a summary of recent ratings and price targets for Dril-Quip and National-Oilwell Varco, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Dril-Quip 0 7 2 0 2.22
National-Oilwell Varco 3 17 5 0 2.08

Dril-Quip currently has a consensus target price of $47.14, suggesting a potential downside of 2.80%. National-Oilwell Varco has a consensus target price of $37.57, suggesting a potential downside of 9.44%. Given Dril-Quip’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Dril-Quip is more favorable than National-Oilwell Varco.

Profitability

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

Net Margins Return on Equity Return on Assets
Dril-Quip -24.83% -0.26% -0.25%
National-Oilwell Varco -2.49% -1.15% -0.79%

Institutional & Insider Ownership

93.9% of National-Oilwell Varco shares are held by institutional investors. 1.1% of Dril-Quip shares are held by insiders. Comparatively, 0.8% of National-Oilwell Varco shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Summary

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

About Dril-Quip

Dril-Quip, Inc., together with its subsidiaries, designs, manufactures, sells, and services onshore and offshore drilling and production equipment for use in deepwater, harsh environment, and severe service applications worldwide. It operates through three segments: Western Hemisphere, Eastern Hemisphere, and Asia-Pacific. The company's principal products include subsea and surface wellheads, subsea and surface production trees, subsea control systems and manifolds, mudline hanger systems, specialty connectors and associated pipes, drilling and production riser systems, liner hangers, wellhead connectors, diverters, and safety valves, as well as consumable downhole products. It also provides technical advisory services, and rework and reconditioning services, as well as rental and purchase of running tools for use in the installation and retrieval of the its products. The company's products are used to explore for oil and gas from offshore drilling rigs, such as floating rigs and jack-up rigs; and for drilling and production of oil and gas wells on offshore platforms, tension leg platforms, and Spars, as well as moored vessels, such as floating production, storage, and offloading monohull moored vessels. It sells its products directly through its sales personnel, independent sales agents, and representatives to integrated, independent, and foreign national oil and gas companies, as well as drilling contractors, and engineering and construction companies. Dril-Quip, Inc. was founded in 1981 and is headquartered in Houston, Texas.

About National-Oilwell Varco

National Oilwell Varco, Inc. designs, manufactures, and sells systems and components used in oil and gas drilling and production; and provides oilfield services to the upstream oil and gas industry worldwide. It operates through three segments: Wellbore Technologies, Completion & Production Solutions, and Rig Technologies. The Wellbore Technologies segment designs, manufactures, rents, and sells various equipment and technologies. This segment also provides solids control and waste management equipment and services, drilling and completion fluids, data acquisition and analytics, water management solutions, managed-pressure-drilling systems, and wellsite logistics solutions; tubular inspection, repair and coating, rope access inspection, and instrumentation services; and power generation equipment, drill and wired pipes, instruments, measuring and monitoring equipment, downhole and fishing tools, hole openers, and drill bits The Completion & Production Solutions segment designs, manufactures, and sells pumping trucks, blenders, sanders, hydration units, injection units, flowline, and manifolds; coiled tubing units, coiled tubing, and wireline units and tools; composite pipe, surface transfer and progressive cavity pumps, and artificial lift systems; and floating production systems and subsea production technologies. The Rig Technologies segment offers land rigs; offshore drilling equipment packages; and drilling rig components It provides substructures, derricks, and masts; cranes; pipe lifting, racking, rotating, and assembly systems; fluid transfer technologies, such as mud pumps; pressure control equipment, including blowout preventers; power transmission systems comprising drives and generators; and rig instrumentation and control systems. This segment also offers spare parts; and repair and rental services, as well as remote equipment monitoring, technical support, field, and training services. The company was founded in 1862 and is based in Houston, Texas.

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