Tenaris (NYSE: TS) and Dril-Quip (NYSE:DRQ) are both industrial products companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, profitabiliy, valuation, risk, earnings and dividends.
Dividends
Tenaris pays an annual dividend of $1.12 per share and has a dividend yield of 3.5%. Dril-Quip does not pay a dividend. Tenaris pays out 266.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Volatility & Risk
Tenaris has a beta of 0.63, suggesting that its share price is 37% less volatile than the S&P 500. Comparatively, Dril-Quip has a beta of 0.65, suggesting that its share price is 35% less volatile than the S&P 500.
Profitability
This table compares Tenaris and Dril-Quip’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Tenaris | 5.55% | 1.23% | 1.01% |
| Dril-Quip | 11.51% | 3.65% | 3.42% |
Earnings & Valuation
This table compares Tenaris and Dril-Quip’s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | EBITDA | Earnings Per Share | Price/Earnings Ratio | |
| Tenaris | $4.24 billion | 4.40 | $678.18 million | $0.42 | 75.22 |
| Dril-Quip | $491.40 million | 3.78 | $100.86 million | $1.50 | 32.73 |
Tenaris has higher revenue and earnings than Dril-Quip. Dril-Quip 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 price targets for Tenaris and Dril-Quip, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Tenaris | 1 | 3 | 7 | 0 | 2.55 |
| Dril-Quip | 0 | 6 | 1 | 0 | 2.14 |
Tenaris presently has a consensus target price of $36.06, indicating a potential upside of 14.16%. Dril-Quip has a consensus target price of $62.17, indicating a potential upside of 26.61%. Given Dril-Quip’s higher possible upside, analysts clearly believe Dril-Quip is more favorable than Tenaris.
Institutional and Insider Ownership
18.7% of Tenaris shares are held by institutional investors. 0.2% of Tenaris shares are held by company insiders. Comparatively, 0.9% of Dril-Quip shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
About Tenaris
Tenaris S.A. is a holding company, which is a steel producer with production facilities in Mexico, Argentina, Colombia, United States and Guatemala. The Company supplies round steel bars and flat steel products for its pipes business. It operates through Tubes business segment. The Tubes segment includes the production and sale of both seamless and welded steel tubular products, and related services primarily for the oil and gas industry, principally oil country tubular goods (OCTG) used in drilling operations, and for other industrial applications with production processes that include in the transformation of steel into tubular products. It operates in geographical areas, such as North America, South America, Europe, Middle East and Africa, and Asia Pacific. Its products and services include OCTG, Premium Connections, Rig Direct, Offshore Line Pipe, Onshore Line Pipe, Hydrocarbon Processing, Power Generation, Sucker Rods, Coiled Tubing, Industrial and Mechanical, and Automotive.
About Dril-Quip
Dril-Quip, Inc. (Dril-Quip) designs, manufactures, sells and services engineered drilling and production equipment. The Company’s operations are organized into three geographic segments: Western Hemisphere, including North and South America, headquartered in Houston, Texas; Eastern Hemisphere, including Europe and Africa, headquartered in Aberdeen, Scotland, and Asia-Pacific, including the Pacific Rim, Southeast Asia, Australia, India and the Middle East, headquartered in Singapore. Its equipment is suited for use in deepwater, harsh environments and service applications. Its principal products consist of subsea and surface wellheads, subsea and surface production trees, subsea control systems and manifolds, mudline hanger systems, specialty connectors and associated pipe, drilling and production riser systems, liner hangers, wellhead connectors and diverters. The Company has manufacturing facilities in approximately three of its headquarter locations, as well as in Macae, Brazil.
Receive News & Ratings for Tenaris S.A. Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Tenaris S.A. and related companies with MarketBeat.com's FREE daily email newsletter.
