Comparing McDermott International (MDR) and Oceaneering International (OII)

McDermott International (NYSE: MDR) and Oceaneering International (NYSE:OII) are both small-cap oils/energy companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, risk, institutional ownership, dividends, profitability, analyst recommendations and earnings.

Earnings & Valuation

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This table compares McDermott International and Oceaneering International’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
McDermott International $2.98 billion 0.53 $178.54 million $0.64 8.77
Oceaneering International $1.92 billion 0.95 $166.39 million ($0.07) -265.29

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

Analyst Recommendations

This is a summary of current recommendations and price targets for McDermott International and Oceaneering International, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
McDermott International 1 3 5 0 2.44
Oceaneering International 3 15 3 0 2.00

McDermott International currently has a consensus price target of $9.42, suggesting a potential upside of 67.91%. Oceaneering International has a consensus price target of $21.97, suggesting a potential upside of 18.29%. Given McDermott International’s stronger consensus rating and higher probable upside, research analysts clearly believe McDermott International is more favorable than Oceaneering International.

Profitability

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

Net Margins Return on Equity Return on Assets
McDermott International 5.98% 10.68% 5.51%
Oceaneering International 8.66% -0.49% -0.24%

Insider and Institutional Ownership

97.7% of McDermott International shares are owned by institutional investors. Comparatively, 99.4% of Oceaneering International shares are owned by institutional investors. 1.3% of McDermott International shares are owned by insiders. Comparatively, 0.9% of Oceaneering International shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Volatility & Risk

McDermott International has a beta of 1.86, meaning that its share price is 86% more volatile than the S&P 500. Comparatively, Oceaneering International has a beta of 1.39, meaning that its share price is 39% more volatile than the S&P 500.

Dividends

Oceaneering International pays an annual dividend of $0.30 per share and has a dividend yield of 1.6%. McDermott International does not pay a dividend. Oceaneering International pays out -428.6% of its earnings in the form of a dividend.

Summary

McDermott International beats Oceaneering International on 10 of the 15 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 Oceaneering International

Oceaneering International, Inc. is an oilfield provider of engineered services and products, primarily to the offshore oil and gas industry, with a focus on deepwater applications. The Company’s business segments are contained within two businesses: services and products provided to the oil and gas industry (Oilfield) and all other services and products (Advanced Technologies). Its four business segments within the Oilfield business are Remotely Operated Vehicles (ROVs), Subsea Products, Subsea Projects and Asset Integrity. The services and products it provides to the oil and gas industry include remotely operated vehicles, specialty subsea hardware, engineering and project management, subsea intervention services, including manned diving, survey and positioning services and asset integrity and nondestructive testing services. The Company serves the defense, aerospace and commercial theme park industries.

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