Critical Contrast: CIRCOR International (CIR) and Tesco Corporation (NASDAQ:TESO)

CIRCOR International (NYSE: CIR) and Tesco Corporation (NASDAQ:TESO) are both small-cap industrial products companies, but which is the better business? We will compare the two businesses based on the strength of their profitabiliy, valuation, institutional ownership, dividends, risk, analyst recommendations and earnings.

Dividends

CIRCOR International pays an annual dividend of $0.15 per share and has a dividend yield of 0.3%. Tesco Corporation does not pay a dividend. CIRCOR International pays out 22.4% of its earnings in the form of a dividend.

Earnings and Valuation

This table compares CIRCOR International and Tesco Corporation’s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	EBITDA	Earnings Per Share	Price/Earnings Ratio
CIRCOR International	$584.67 million	1.60	$56.38 million	$0.67	84.75
Tesco Corporation	$136.03 million	1.49	-$39.49 million	($1.67)	-2.60

CIRCOR International has higher revenue and earnings than Tesco Corporation. Tesco Corporation is trading at a lower price-to-earnings ratio than CIRCOR International, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

95.1% of Tesco Corporation shares are held by institutional investors. 2.7% of CIRCOR International shares are held by company insiders. Comparatively, 1.7% of Tesco Corporation shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for CIRCOR International and Tesco Corporation, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CIRCOR International	1	1	3	0	2.40
Tesco Corporation	1	2	3	0	2.33

CIRCOR International presently has a consensus price target of $64.00, suggesting a potential upside of 12.72%. Tesco Corporation has a consensus price target of $7.00, suggesting a potential upside of 60.92%. Given Tesco Corporation’s higher possible upside, analysts plainly believe Tesco Corporation is more favorable than CIRCOR International.

Risk and Volatility

CIRCOR International has a beta of 1.69, meaning that its stock price is 69% more volatile than the S&P 500. Comparatively, Tesco Corporation has a beta of 1.21, meaning that its stock price is 21% more volatile than the S&P 500.

Profitability

This table compares CIRCOR International and Tesco Corporation’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
CIRCOR International	1.88%	7.21%	4.03%
Tesco Corporation	-55.00%	-18.65%	-16.87%

Summary

CIRCOR International beats Tesco Corporation on 11 of the 14 factors compared between the two stocks.

About CIRCOR International

CIRCOR International, Inc. (CIRCOR) designs, manufactures and markets engineered products and sub-systems for markets, including oil and gas, aerospace, power and process, and industrial solutions. The Company operates through two segments: CIRCOR Energy (Energy segment (Energy)) and CIRCOR Advanced Flow Solutions (Advanced Flow Solutions segment (AFS)). Energy provides engineered integrated flow control solutions, valves and services primarily in the oil and gas end market. AFS is a flow control technology platform. Energy provides its flow control solutions and services through the brands, including Circle Seal Controls, DeltaValve, Contromatics, Dopak Sampling and others. AFS manufactures and markets control valves, automatic recirculation valves, regulators, fluid controls, actuation systems, landing gear components, pneumatic controls, electro-mechanical controls, and other flow control products and systems. As of December 31, 2016, it operated 19 manufacturing facilities.

About Tesco Corporation

Tesco Corporation is a provider of technology-based solutions for drilling, servicing and completion of wells for the upstream energy industry. The Company’s operations consist of top drives and automated pipe handling equipment sales and rentals; aftermarket sales and services, and tubular services, including related products and accessories sales. Its segments include Products, Tubular Services, Research and Engineering, and Corporate and Other. The Products segment includes top drives and automated pipe handling equipment sales, rentals and aftermarket sales and services. The Tubular Services segment includes onshore and offshore tubular services and sales of related products and accessories. The Research and Engineering segment includes internal research, engineering, and development activities related to its products and tubular services. The Corporate and Other segment includes executive management and various global support and compliance functions.