Dril-Quip (NYSE: DRQ) and Tenaris (NYSE:TS) are both oils/energy companies, but which is the better business? We will contrast the two companies based on the strength of their profitabiliy, institutional ownership, analyst recommendations, risk, dividends, earnings and valuation.
Dividends
Tenaris pays an annual dividend of $1.12 per share and has a dividend yield of 3.9%. Dril-Quip does not pay a dividend. Tenaris pays out 196.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Insider and Institutional Ownership
18.7% of Tenaris shares are owned by institutional investors. 0.9% of Dril-Quip shares are owned by company insiders. Comparatively, 0.2% of Tenaris shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
Earnings & Valuation
This table compares Dril-Quip and Tenaris’ revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | EBITDA | Earnings Per Share | Price/Earnings Ratio | |
| Dril-Quip | $476.88 million | 3.38 | $59.69 million | $0.54 | 78.89 |
| Tenaris | $4.24 billion | 3.97 | $678.18 million | $0.57 | 50.05 |
Tenaris has higher revenue and earnings than Dril-Quip. Tenaris 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 breakdown of recent ratings and target prices for Dril-Quip and Tenaris, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Dril-Quip | 0 | 6 | 1 | 0 | 2.14 |
| Tenaris | 1 | 3 | 7 | 0 | 2.55 |
Dril-Quip presently has a consensus price target of $53.67, suggesting a potential upside of 25.98%. Tenaris has a consensus price target of $35.17, suggesting a potential upside of 23.26%. Given Dril-Quip’s higher probable upside, equities research analysts plainly believe Dril-Quip is more favorable than Tenaris.
Profitability
This table compares Dril-Quip and Tenaris’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Dril-Quip | 4.28% | 2.12% | 1.99% |
| Tenaris | 7.35% | 2.00% | 1.63% |
Risk and Volatility
Dril-Quip has a beta of 0.63, indicating that its share price is 37% less volatile than the S&P 500. Comparatively, Tenaris has a beta of 0.63, indicating that its share price is 37% less volatile than the S&P 500.
Summary
Tenaris beats Dril-Quip on 10 of the 15 factors compared between the two stocks.
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.
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.
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