Critical Analysis: Subsea 7 (SUBCY) & Gazprom Neft’ PAO (GDR) (GZPFY)

Subsea 7 (OTCMKTS:SUBCY) and Gazprom Neft’ PAO (GDR) (OTCMKTS:GZPFY) are both oils/energy companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, analyst recommendations, earnings, institutional ownership, dividends, valuation and risk.

Dividends

Gazprom Neft’ PAO (GDR) pays an annual dividend of $2.79 per share and has a dividend yield of 10.2%. Subsea 7 does not pay a dividend. Gazprom Neft’ PAO (GDR) pays out 46.6% of its earnings in the form of a dividend.

Risk & Volatility

Subsea 7 has a beta of 1.53, suggesting that its share price is 53% more volatile than the S&P 500. Comparatively, Gazprom Neft’ PAO (GDR) has a beta of 0.78, suggesting that its share price is 22% less volatile than the S&P 500.

Valuation & Earnings

This table compares Subsea 7 and Gazprom Neft’ PAO (GDR)’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Subsea 7 $4.07 billion N/A $182.50 million $0.56 23.11
Gazprom Neft’ PAO (GDR) $37.35 billion N/A $5.65 billion $5.99 4.55

Gazprom Neft’ PAO (GDR) has higher revenue and earnings than Subsea 7. Gazprom Neft’ PAO (GDR) is trading at a lower price-to-earnings ratio than Subsea 7, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent recommendations for Subsea 7 and Gazprom Neft’ PAO (GDR), as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Subsea 7 0 2 4 0 2.67
Gazprom Neft’ PAO (GDR) 0 0 0 0 N/A

Profitability

This table compares Subsea 7 and Gazprom Neft’ PAO (GDR)’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Subsea 7 4.48% 3.10% 2.35%
Gazprom Neft’ PAO (GDR) 15.10% 19.71% 11.64%

Summary

Gazprom Neft’ PAO (GDR) beats Subsea 7 on 7 of the 11 factors compared between the two stocks.

Subsea 7 Company Profile

Subsea 7 S.A. operates as a seabed-to-surface engineering, construction, and services contractor to the offshore energy industry worldwide. It provides subsea field development products and services, including project management, design and engineering, procurement, fabrication, survey, installation, and commissioning of production facilities on the seabed and the tie-back of its facilities to fixed or floating platforms or to the shore. The company also offers engineering, procurement, construction, and installation of subsea umbilicals, risers, and flowlines; life of field services, such as inspection, repair, maintenance, integrity management, and remote intervention of subsea infrastructure; conventional services comprising fabrication, installation, extension, and refurbishment of fixed and floating platforms and associated pipelines; hook-up services; and refurbishment of fixed and floating platforms in shallow water. In addition, it operates heavy lifting vessels and oil and gas structures; and installs offshore wind farm foundations, as well as engages in the decommissioning of redundant offshore structures. Further, the company provides remotely operated vehicles (ROVs) and tooling services to support exploration and production activities. It has a fleet of 35 vessels; 2 vessels under construction; and 166 ROVs. Subsea 7 S.A. was incorporated in 1993 and is based in Luxembourg City, Luxembourg.

Gazprom Neft’ PAO (GDR) Company Profile

PJSC Gazprom Neft, an integrated oil company, engages in the exploration, development, production, and sale of crude oil and gas in Russia, the CIS countries, and internationally. The company also involved in the production, distribution, and marketing of refined petroleum products. It holds interests in 90 resource licenses in the oil-producing regions of Russia; and production projects in Angola, Bosnia, Herzegovina, Romania, Serbia, Iraq, and Venezuela. As of December 31, 2017, the company had total proved reserves of 6,439 million barrels of oil equivalent. It also produces and sells motor and jet fuels, lubricants, bitumen products, and petrochemical products, as well as provides bunkering services to various industries and sectors. The company sells its fuels through 1,838 filling stations. PJSC Gazprom Neft was founded in 1995 and is based in St. Petersburg, Russia.

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