Critical Contrast: Eco-Stim Energy Solutions (NASDAQ:ESES) & National-Oilwell Varco (NOV)

National-Oilwell Varco (NYSE: NOV) and Eco-Stim Energy Solutions (NASDAQ:ESES) are both energy companies, but which is the better business? We will compare the two businesses based on the strength of their dividends, earnings, profitability, valuation, analyst recommendations, institutional ownership and risk.

Earnings & Valuation

This table compares National-Oilwell Varco and Eco-Stim Energy Solutions’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
National-Oilwell Varco $7.30 billion 1.72 -$237.00 million ($0.63) -52.59
Eco-Stim Energy Solutions $8.35 million 11.61 -$17.92 million ($1.09) -1.19

Eco-Stim Energy Solutions has lower revenue, but higher earnings than National-Oilwell Varco. National-Oilwell Varco is trading at a lower price-to-earnings ratio than Eco-Stim Energy Solutions, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

91.7% of National-Oilwell Varco shares are owned by institutional investors. Comparatively, 84.0% of Eco-Stim Energy Solutions shares are owned by institutional investors. 0.6% of National-Oilwell Varco shares are owned by company insiders. Comparatively, 11.1% of Eco-Stim Energy Solutions shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Dividends

National-Oilwell Varco pays an annual dividend of $0.20 per share and has a dividend yield of 0.6%. Eco-Stim Energy Solutions does not pay a dividend. National-Oilwell Varco pays out -31.7% of its earnings in the form of a dividend.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for National-Oilwell Varco and Eco-Stim Energy Solutions, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
National-Oilwell Varco 3 15 6 0 2.13
Eco-Stim Energy Solutions 0 0 5 0 3.00

National-Oilwell Varco currently has a consensus target price of $37.80, suggesting a potential upside of 14.10%. Eco-Stim Energy Solutions has a consensus target price of $2.36, suggesting a potential upside of 81.54%. Given Eco-Stim Energy Solutions’ stronger consensus rating and higher possible upside, analysts plainly believe Eco-Stim Energy Solutions is more favorable than National-Oilwell Varco.

Profitability

This table compares National-Oilwell Varco and Eco-Stim Energy Solutions’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
National-Oilwell Varco -3.24% -1.10% -0.75%
Eco-Stim Energy Solutions -85.29% -43.11% -23.60%

Risk and Volatility

National-Oilwell Varco has a beta of 0.89, suggesting that its share price is 11% less volatile than the S&P 500. Comparatively, Eco-Stim Energy Solutions has a beta of 2.14, suggesting that its share price is 114% more volatile than the S&P 500.

Summary

National-Oilwell Varco beats Eco-Stim Energy Solutions on 9 of the 16 factors compared between the two stocks.

About National-Oilwell Varco

National Oilwell Varco, Inc. is an oilfield equipment manufacturer and technology provider. The Company operates through four segments: Rig Systems, Rig Aftermarket, Wellbore Technologies and Completion & Production Solutions. The Rig Systems segment makes and supports the capital equipment and integrated systems needed to drill oil and gas wells on land and offshore. The Rig Systems segment designs, manufactures and sells land rigs, offshore drilling equipment packages, and drilling rig components. The Rig Aftermarket segment provides aftermarket products and services to support a large installed base of land and offshore rigs, and drilling rig components manufactured by the Company’s Rig Systems segment. The Wellbore Technologies segment designs, manufactures, rents and sells a range of equipment and technologies used to perform drilling operations. The Completion & Production Solutions segment integrates technologies for well completions and oil and gas production.

About Eco-Stim Energy Solutions

Eco-Stim Energy Solutions, Inc. is an oilfield services company. The Company provides well stimulation, coiled tubing and field management services to the upstream oil and gas industry. The Company focuses on the active shale and unconventional oil and natural gas basins outside the United States and it has commenced operations in Argentina. The Company operates well stimulation fleets, coiled tubing units and other downhole completion equipment, as well as provides sweet spot analysis in shale resource basins using geophysical predictive modeling combined with real-time feedback from down-hole diagnostic tools. The Company offers a pumping fleet, including well-stimulation pumps, nitrogen pumping units and cranes, in both trailer-mounted and skid-mounted configurations. It provides a range of pressure-pumping services, including work-over pumping, well injection and wireline pump downs.

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