Natural Gas Services Group (NYSE:NGS) versus Tenaris (TS) Critical Comparison

Tenaris (NYSE: TS) and Natural Gas Services Group (NYSE:NGS) are both industrial products companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, analyst recommendations, profitability, valuation, dividends, institutional ownership and earnings.

Dividends

Tenaris pays an annual dividend of $1.12 per share and has a dividend yield of 4.1%. Natural Gas Services Group 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.

Profitability

This table compares Tenaris and Natural Gas Services Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Tenaris	7.35%	2.00%	1.63%
Natural Gas Services Group	4.85%	1.41%	1.13%

Analyst Ratings

This is a summary of current recommendations for Tenaris and Natural Gas Services Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Tenaris	1	3	7	0	2.55
Natural Gas Services Group	0	0	2	0	3.00

Tenaris currently has a consensus target price of $35.17, suggesting a potential upside of 27.42%. Natural Gas Services Group has a consensus target price of $35.50, suggesting a potential upside of 50.42%. Given Natural Gas Services Group’s stronger consensus rating and higher possible upside, analysts clearly believe Natural Gas Services Group is more favorable than Tenaris.

Institutional and Insider Ownership

17.6% of Tenaris shares are held by institutional investors. Comparatively, 82.9% of Natural Gas Services Group shares are held by institutional investors. 0.2% of Tenaris shares are held by insiders. Comparatively, 6.5% of Natural Gas Services Group shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Volatility & Risk

Tenaris has a beta of 0.63, suggesting that its share price is 37% less volatile than the S&P 500. Comparatively, Natural Gas Services Group has a beta of 1.23, suggesting that its share price is 23% more volatile than the S&P 500.

Valuation & Earnings

This table compares Tenaris and Natural Gas Services Group’s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	EBITDA	Earnings Per Share	Price/Earnings Ratio
Tenaris	$4.43 billion	3.68	$774.70 million	$0.57	48.42
Natural Gas Services Group	$68.00 million	4.49	$25.46 million	$0.26	90.77

Tenaris has higher revenue and earnings than Natural Gas Services Group. Tenaris is trading at a lower price-to-earnings ratio than Natural Gas Services Group, indicating that it is currently the more affordable of the two stocks.

Tenaris Company Profile

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.

Natural Gas Services Group Company Profile

Natural Gas Services Group, Inc. is a provider of small to medium horsepower compression equipment to the natural gas industry. The Company focuses primarily on the non-conventional natural gas and oil production business in the United States, such as coal bed methane, gas shale, tight gas and oil shales. The Company manufactures, fabricates and rents natural gases compressors that enhance the production of natural gas wells and provides maintenance services for its natural gas compressors. In addition, it sells custom fabricated natural gas compressors to meet customer specifications dictated by well pressures, production characteristics and particular applications. It also manufactures and sells flare systems for oil and gas plant and production facilities. The Company’s operating units include Gas Compressor Rental, Engineered Equipment Sales, Service and Maintenance, and Corporate.