Head-To-Head Contrast: National Oilwell Varco (NYSE:NOV) and Schlumberger N.V. (SLB)

National Oilwell Varco (NYSE: NOV) and Schlumberger N.V. (NYSE:SLB) are both large-cap oils/energy companies, but which is the better investment? We will compare the two companies based on the strength of their profitabiliy, institutional ownership, analyst recommendations, dividends, risk, earnings and valuation.

Profitability

This table compares National Oilwell Varco and Schlumberger N.V.’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
National Oilwell Varco	-33.24%	-2.12%	-1.41%
Schlumberger N.V.	0.62%	3.80%	2.02%

Analyst Ratings

This is a summary of recent recommendations and price targets for National Oilwell Varco and Schlumberger N.V., as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
National Oilwell Varco	3	16	5	0	2.08
Schlumberger N.V.	0	8	18	1	2.74

National Oilwell Varco presently has a consensus price target of $38.05, suggesting a potential upside of 19.70%. Schlumberger N.V. has a consensus price target of $86.04, suggesting a potential upside of 29.29%. Given Schlumberger N.V.’s stronger consensus rating and higher possible upside, analysts plainly believe Schlumberger N.V. is more favorable than National Oilwell Varco.

Insider and Institutional Ownership

91.0% of National Oilwell Varco shares are held by institutional investors. Comparatively, 79.1% of Schlumberger N.V. shares are held by institutional investors. 0.6% of National Oilwell Varco shares are held by company insiders. Comparatively, 0.4% of Schlumberger N.V. shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Volatility and Risk

National Oilwell Varco has a beta of 1, meaning that its stock price has a similar volatility profile to the S&P 500.Comparatively, Schlumberger N.V. has a beta of 1.02, meaning that its stock price is 2% more volatile than the S&P 500.

Earnings & Valuation

This table compares National Oilwell Varco and Schlumberger N.V.’s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	EBITDA	Earnings Per Share	Price/Earnings Ratio
National Oilwell Varco	$6.84 billion	1.77	-$440.00 million	($6.04)	-5.26
Schlumberger N.V.	$28.48 billion	3.24	$6.27 billion	$0.13	511.96

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

Dividends

National Oilwell Varco pays an annual dividend of $0.20 per share and has a dividend yield of 0.6%. Schlumberger N.V. pays an annual dividend of $2.00 per share and has a dividend yield of 3.0%. National Oilwell Varco pays out -3.3% of its earnings in the form of a dividend. Schlumberger N.V. pays out 1,538.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Schlumberger N.V. has raised its dividend for 6 consecutive years. Schlumberger N.V. is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Schlumberger N.V. beats National Oilwell Varco on 14 of the 17 factors compared between the two stocks.

About National Oilwell Varco

National Oilwell Varco, Inc. is an oilfield equipment manufacturer and technology provider. The Company operates through four segments: Rig Systems, Rig Aftermarket, Wellbore Technologies and Completion & Production Solutions. The Rig Systems segment makes and supports the capital equipment and integrated systems needed to drill oil and gas wells on land and offshore. The Rig Systems segment designs, manufactures and sells land rigs, offshore drilling equipment packages, and drilling rig components. The Rig Aftermarket segment provides aftermarket products and services to support a large installed base of land and offshore rigs, and drilling rig components manufactured by the Company’s Rig Systems segment. The Wellbore Technologies segment designs, manufactures, rents and sells a range of equipment and technologies used to perform drilling operations. The Completion & Production Solutions segment integrates technologies for well completions and oil and gas production.

About Schlumberger N.V.

Schlumberger N.V. provides technology for reservoir characterization, drilling, production and processing to the oil and gas industry. The Company’s segments include Reservoir Characterization Group, Drilling Group, Production Group and Cameron Group. The Reservoir Characterization Group consists of the principal technologies involved in finding and defining hydrocarbon resources. The Drilling Group consists of the principal technologies involved in the drilling and positioning of oil and gas wells. The Production Group consists of the principal technologies involved in the lifetime production of oil and gas reservoirs and includes Well Services, Completions, Artificial Lift, Integrated Production Services (IPS) and Schlumberger Production Management (SPM). The Cameron Group consists of the principal technologies involved in pressure and flow control for drilling and intervention rigs, oil and gas wells and production facilities.