Financial Analysis: Halliburton (HAL) vs. Forum Energy Technologies (FET)

Forum Energy Technologies (NYSE: FET) and Halliburton (NYSE:HAL) are both energy companies, but which is the superior stock? We will contrast the two companies based on the strength of their risk, profitability, earnings, dividends, valuation, analyst recommendations and institutional ownership.

Profitability

This table compares Forum Energy Technologies and Halliburton’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Forum Energy Technologies -16.85% -3.97% -2.63%
Halliburton 1.13% 6.93% 2.47%

Institutional and Insider Ownership

95.7% of Forum Energy Technologies shares are held by institutional investors. Comparatively, 79.9% of Halliburton shares are held by institutional investors. 32.8% of Forum Energy Technologies shares are held by insiders. Comparatively, 0.5% of Halliburton shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Earnings & Valuation

This table compares Forum Energy Technologies and Halliburton’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Forum Energy Technologies $587.60 million 3.18 -$81.97 million ($1.26) -13.73
Halliburton $15.89 billion 2.90 -$5.76 billion $0.24 220.13

Forum Energy Technologies has higher earnings, but lower revenue than Halliburton. Forum Energy Technologies is trading at a lower price-to-earnings ratio than Halliburton, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Forum Energy Technologies and Halliburton, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Forum Energy Technologies 0 12 2 0 2.14
Halliburton 0 2 22 0 2.92

Forum Energy Technologies presently has a consensus target price of $18.08, indicating a potential upside of 4.49%. Halliburton has a consensus target price of $56.58, indicating a potential upside of 7.10%. Given Halliburton’s stronger consensus rating and higher possible upside, analysts clearly believe Halliburton is more favorable than Forum Energy Technologies.

Dividends

Halliburton pays an annual dividend of $0.72 per share and has a dividend yield of 1.4%. Forum Energy Technologies does not pay a dividend. Halliburton pays out 300.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Volatility & Risk

Forum Energy Technologies has a beta of 1.66, meaning that its stock price is 66% more volatile than the S&P 500. Comparatively, Halliburton has a beta of 1.03, meaning that its stock price is 3% more volatile than the S&P 500.

Summary

Halliburton beats Forum Energy Technologies on 10 of the 16 factors compared between the two stocks.

About Forum Energy Technologies

Forum Energy Technologies, Inc. is an oilfield products company. The Company designs, manufactures and distributes products, and engages in aftermarket services, parts supply and related services. The Company operates through three segments: Drilling & Subsea, Completions, and Production & Infrastructure. The Drilling & Subsea segment designs and manufactures products, and provides related services to the drilling and subsea construction markets. The Completions segment designs, manufactures and supplies products, and provide related services to the well construction, completion, stimulation and intervention markets. The Production & Infrastructure segment designs, manufactures and supplies products, and provides related equipment and services to production and infrastructure markets. Its product offering includes a mix of engineered capital products and replaced items that are used in the exploration, development, production and transportation of oil and natural gas.

About Halliburton

Halliburton Company provides services and products to the upstream oil and natural gas industry throughout the lifecycle of the reservoir, from locating hydrocarbons and managing geological data, to drilling and formation evaluation, well construction and completion, and optimizing production throughout the life of the field. It operates through two segments: the Completion and Production segment, and the Drilling and Evaluation segment. The Completion and Production segment delivers cementing, stimulation, intervention, pressure control, specialty chemicals, artificial lift and completion services. The Drilling and Evaluation segment provides field and reservoir modeling, drilling, evaluation and wellbore placement solutions that enable customers to model, measure, drill and optimize their well construction activities. It serves national and independent oil and natural gas companies. As of December 31, 2016, it had conducted business in approximately 70 countries around the world.

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