Analyzing McDermott International (MDR) & USA Compression Partners, (USAC)

McDermott International (NYSE: MDR) and USA Compression Partners, (NYSE:USAC) are both oils/energy companies, but which is the superior stock? We will compare the two businesses based on the strength of their valuation, institutional ownership, profitability, analyst recommendations, earnings, dividends and risk.

Profitability

This table compares McDermott International and USA Compression Partners,’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
McDermott International 2.95% 5.55% 2.78%
USA Compression Partners, 1.20% 1.38% 0.65%

Earnings & Valuation

This table compares McDermott International and USA Compression Partners,’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
McDermott International $2.51 billion 0.81 $304.29 million $0.27 26.63
USA Compression Partners, $268.09 million 3.97 $129.99 million $0.03 576.00

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

Institutional and Insider Ownership

87.1% of McDermott International shares are owned by institutional investors. 1.3% of McDermott International shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings and price targets for McDermott International and USA Compression Partners,, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
McDermott International 0 4 3 0 2.43
USA Compression Partners, 0 2 1 0 2.33

McDermott International presently has a consensus target price of $8.47, indicating a potential upside of 17.76%. USA Compression Partners, has a consensus target price of $18.00, indicating a potential upside of 4.17%. Given McDermott International’s stronger consensus rating and higher probable upside, equities research analysts plainly believe McDermott International is more favorable than USA Compression Partners,.

Volatility & Risk

McDermott International has a beta of 1.41, meaning that its stock price is 41% more volatile than the S&P 500. Comparatively, USA Compression Partners, has a beta of 1.18, meaning that its stock price is 18% more volatile than the S&P 500.

Dividends

USA Compression Partners, pays an annual dividend of $2.10 per share and has a dividend yield of 12.2%. McDermott International does not pay a dividend. USA Compression Partners, pays out 7,000.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

McDermott International beats USA Compression Partners, on 13 of the 16 factors compared between the two stocks.

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.

About USA Compression Partners,

USA Compression Partners, LP is an independent provider of compression services in the United States. The Company provides compression services to its customers primarily in connection with infrastructure applications, including both allowing for the processing and transportation of natural gas through the domestic pipeline system and managing crude oil production through artificial lift processes. The Company engineers, designs, operates, services and repairs its compression units, and maintains related support inventory and equipment. It provides compression services in mature conventional basins, including gas lift applications on crude oil wells focused by horizontal drilling techniques. The Company provides compression services in various shale plays throughout the United States, including the Utica, Marcellus, Permian Basin, Delaware Basin, Eagle Ford, Mississippi Lime, Granite Wash, Woodford, Barnett, Haynesville, Niobrara and Fayetteville shales.

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