Weatherford International (OTCMKTS:WFTIF) vs. Dril-Quip (OTCMKTS:DRQ) Critical Comparison

Weatherford International (OTCMKTS:WFTIF) and Dril-Quip (NYSE:DRQ) are both small-cap oils/energy companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, valuation, institutional ownership, analyst recommendations, dividends, earnings and profitability.

Analyst Ratings

This is a breakdown of recent ratings for Weatherford International and Dril-Quip, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Weatherford International 1 0 0 0 1.00
Dril-Quip 1 5 1 0 2.00

Dril-Quip has a consensus price target of $46.17, suggesting a potential upside of 5.45%. Given Dril-Quip’s stronger consensus rating and higher possible upside, analysts plainly believe Dril-Quip is more favorable than Weatherford International.

Valuation & Earnings

This table compares Weatherford International and Dril-Quip’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Weatherford International $5.74 billion 0.01 -$2.81 billion ($0.59) -0.09
Dril-Quip $384.63 million 4.12 -$95.69 million ($0.63) -69.49

Dril-Quip has lower revenue, but higher earnings than Weatherford International. Dril-Quip is trading at a lower price-to-earnings ratio than Weatherford International, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

85.7% of Weatherford International shares are held by institutional investors. 0.4% of Weatherford International shares are held by insiders. Comparatively, 1.0% of Dril-Quip shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Risk & Volatility

Weatherford International has a beta of 2.88, meaning that its share price is 188% more volatile than the S&P 500. Comparatively, Dril-Quip has a beta of 1.41, meaning that its share price is 41% more volatile than the S&P 500.

Profitability

This table compares Weatherford International and Dril-Quip’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Weatherford International -53.77% N/A -7.53%
Dril-Quip -24.85% -1.88% -1.74%

Summary

Dril-Quip beats Weatherford International on 8 of the 14 factors compared between the two stocks.

About Weatherford International

Weatherford International Plc provides equipment and services to the oil and natural gas exploration and production industry. It operates through two segments: Western Hemisphere and Eastern Hemispher. The company products and services are Drilling and Evaluation, Production, Completions, and Well Construction. Weatherford International was founded in 1941 and is headquartered in Baar, Switzerland.

About Dril-Quip

Dril-Quip, Inc., together with its subsidiaries, designs, manufactures, sells, and services onshore and offshore drilling and production equipment for use in deepwater, harsh environment, and severe service applications worldwide. It operates through three segments: Western Hemisphere, Eastern Hemisphere, and Asia-Pacific. The company's principal products include subsea and surface wellheads, subsea and surface production trees, subsea control systems and manifolds, mudline hanger systems, specialty connectors and associated pipes, drilling and production riser systems, liner hangers, wellhead connectors, diverters, and safety valves, as well as consumable downhole products. It also provides technical advisory services, and rework and reconditioning services, as well as rental and purchase of running tools for use in the installation and retrieval of the its products. The company's products are used to explore for oil and gas from offshore drilling rigs, such as floating rigs and jack-up rigs; and for drilling and production of oil and gas wells on offshore platforms, tension leg platforms, and Spars, as well as moored vessels, such as floating production, storage, and offloading monohull moored vessels. It sells its products directly through its sales personnel, independent sales agents, and representatives to integrated, independent, and foreign national oil and gas companies, as well as drilling contractors, and engineering and construction companies. Dril-Quip, Inc. was founded in 1981 and is headquartered in Houston, Texas.

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