Critical Survey: Helix Energy Solutions Group (HLX) & McDermott International (MDR)

Helix Energy Solutions Group (NYSE: HLX) and McDermott International (NYSE:MDR) are both oils/energy companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, valuation, profitability, analyst recommendations, dividends, institutional ownership and risk.

Earnings and Valuation

This table compares Helix Energy Solutions Group and McDermott International’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Helix Energy Solutions Group $487.58 million 2.01 -$81.44 million ($0.59) -11.24
McDermott International $2.64 billion 0.80 $34.11 million $0.54 13.76

McDermott International has higher revenue and earnings than Helix Energy Solutions Group. Helix Energy Solutions Group is trading at a lower price-to-earnings ratio than McDermott International, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Helix Energy Solutions Group has a beta of 2.6, suggesting that its stock price is 160% more volatile than the S&P 500. Comparatively, McDermott International has a beta of 1.35, suggesting that its stock price is 35% more volatile than the S&P 500.

Institutional and Insider Ownership

86.0% of Helix Energy Solutions Group shares are owned by institutional investors. Comparatively, 86.1% of McDermott International shares are owned by institutional investors. 5.7% of Helix Energy Solutions Group shares are owned by company insiders. Comparatively, 1.3% of McDermott International shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Helix Energy Solutions Group and McDermott International, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Helix Energy Solutions Group 0 3 5 0 2.63
McDermott International 0 4 3 0 2.43

Helix Energy Solutions Group presently has a consensus price target of $8.55, suggesting a potential upside of 28.96%. McDermott International has a consensus price target of $7.91, suggesting a potential upside of 6.46%. Given Helix Energy Solutions Group’s stronger consensus rating and higher probable upside, equities analysts plainly believe Helix Energy Solutions Group is more favorable than McDermott International.

Profitability

This table compares Helix Energy Solutions Group and McDermott International’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Helix Energy Solutions Group -13.72% -1.80% -1.11%
McDermott International 5.25% 9.56% 4.80%

Summary

McDermott International beats Helix Energy Solutions Group on 7 of the 13 factors compared between the two stocks.

About Helix Energy Solutions Group

Helix Energy Solutions Group, Inc. is an international offshore energy services company. The Company provides services to the offshore energy industry, with a focus on well intervention and robotics operations. The Company operates in three segments: Well Intervention, Robotics and Production Facilities. Its Well Intervention segment includes the Company’s vessels and equipment used to perform well intervention services primarily in the Gulf of Mexico and North Sea regions. Its Robotics segment includes remotely operated vehicles (ROVs), trenchers and ROVDrills designed to complement offshore construction and well intervention services, and operates chartered ROV support vessels. Its Production Facilities segment includes the Helix Producer I (the HP I), a floating production vessel, the Helix Fast Response System (the HFRS), and its ownership interest in Independence Hub, LLC (Independence Hub).

About McDermott International

McDermott International, Inc. is a provider of integrated engineering, procurement, construction and installation (EPCI), front-end engineering and design (FEED) and module fabrication services for upstream field developments across the world. The Company delivers fixed and floating production facilities, pipeline installations and subsea systems from concept to commissioning for offshore and subsea oil and gas projects. It operates through three segments: the Americas, Europe and Africa (AEA), the Middle East (MEA) and Asia (ASA). As of December 31, 2016, operated in approximately 20 countries across the Americas, Europe, Africa, the Middle East, Asia and Australia, its integrated resources include a diversified fleet of marine vessels, fabrication facilities and engineering offices. It support its activities with project management and procurement services, while utilizing its fully integrated capabilities in both shallow water and deepwater construction.

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