Contrasting Weatherford International (OTCMKTS:WFTIQ) & Cactus (OTCMKTS:WHD)

Weatherford International (OTCMKTS:WFTIQ) and Cactus (NYSE:WHD) are both oils/energy companies, but which is the superior business? We will contrast the two businesses based on the strength of their dividends, earnings, profitability, institutional ownership, analyst recommendations, valuation and risk.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Weatherford International and Cactus, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Weatherford International 0 0 0 0 N/A
Cactus 0 1 6 1 3.00

Cactus has a consensus target price of $37.00, indicating a potential upside of 13.78%. Given Cactus’ higher possible upside, analysts clearly believe Cactus is more favorable than Weatherford International.

Valuation and Earnings

This table compares Weatherford International and Cactus’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Weatherford International $5.74 billion 0.00 -$2.81 billion ($0.59) -0.03
Cactus $544.14 million 4.49 $65.33 million $1.78 18.27

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

Insider and Institutional Ownership

1.0% of Weatherford International shares are held by institutional investors. Comparatively, 65.3% of Cactus shares are held by institutional investors. 0.4% of Weatherford International shares are held by company insiders. Comparatively, 24.7% of Cactus shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares Weatherford International and Cactus’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Weatherford International -68.93% N/A -13.49%
Cactus 13.45% 30.14% 17.70%

Volatility & Risk

Weatherford International has a beta of 2.83, indicating that its stock price is 183% more volatile than the S&P 500. Comparatively, Cactus has a beta of 1.22, indicating that its stock price is 22% more volatile than the S&P 500.

Summary

Cactus beats Weatherford International on 12 of the 14 factors compared between the two stocks.

About Weatherford International

Weatherford International plc, an oilfield service company, provides equipment and services for the drilling, evaluation, completion, production, and intervention of oil and natural gas wells worldwide. The company operates in two segments, Western Hemisphere and Eastern Hemisphere. It offers artificial lift systems, including reciprocating rod, progressing cavity pumping, gas, hydraulic, plunger, and hybrid lift systems, as well as related automation and control systems; pressure pumping and reservoir stimulation services, such as acidizing, fracturing and fluid systems, cementing, and coiled-tubing intervention; and drill stem test tools, and surface well testing and multiphase flow measurement services. The company also provides safety, downhole reservoir monitoring, flow control, and multistage fracturing systems, as well as sand-control technologies, and production and isolation packers; liner hangers to suspend a casing string in high-temperature and high-pressure wells; cementing products, including plugs, float and stage equipment, and torque-and-drag reduction technology for zonal isolation; and pre-job planning and installation services. In addition, it offers directional drilling services, and logging and measurement services while drilling; services related to rotary-steerable systems, high-temperature and high-pressure sensors, drilling reamers, and circulation subs; managed pressure drilling, conventional mud-logging, drilling instrumentation, gas analysis, wellsite consultancy, and open hole and cased-hole logging services; reservoir solutions and software products; and intervention and remediation services. Further, the company provides equipment and related services through a fleet of land drilling and workover rigs. Weatherford International plc was founded in 1972 and is based in Huston, Texas. On July 1, 2019, Weatherford International, plc, along with its affiliates, filed a voluntary petition for reorganization under Chapter 11 in the U.S. Bankruptcy Court for the Southern District of Texas.

About Cactus

Cactus, Inc. designs, manufactures, sells, and rents a range of wellheads and pressure control equipment. The company's principal products include Cactus SafeDrill wellhead systems, frac stacks, zipper manifolds, and production trees. It also provides field services, such as 24-hour service crews to assist with the installation, maintenance, and safe handling of the wellhead and pressure control equipment, as well as repair services for equipment that it sells or rents. The company sells or rents its products for onshore unconventional oil and gas wells that are utilized during the drilling, completion, and production phases of its customers' wells. It operates 14 service centers in the United States, as well as a service center in Eastern Australia. The company was founded in 2011 and is headquartered in Houston, Texas.

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