Subsea 7 (SUBCY) vs. Its Peers Critical Review

Subsea 7 (OTC:SUBCY) is one of 34 public companies in the “Oil & gas field services, not elsewhere classified” industry, but how does it weigh in compared to its competitors? We will compare Subsea 7 to similar businesses based on the strength of its risk, dividends, profitability, analyst recommendations, earnings, valuation and institutional ownership.

Insider & Institutional Ownership

0.0% of Subsea 7 shares are held by institutional investors. Comparatively, 57.9% of shares of all “Oil & gas field services, not elsewhere classified” companies are held by institutional investors. 1.0% of Subsea 7 shares are held by insiders. Comparatively, 10.7% of shares of all “Oil & gas field services, not elsewhere classified” companies are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Risk and Volatility

Subsea 7 has a beta of 1.71, meaning that its stock price is 71% more volatile than the S&P 500. Comparatively, Subsea 7’s competitors have a beta of 2.25, meaning that their average stock price is 125% more volatile than the S&P 500.

Dividends

Subsea 7 pays an annual dividend of $0.54 per share and has a dividend yield of 3.3%. Subsea 7 pays out 100.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Oil & gas field services, not elsewhere classified” companies pay a dividend yield of 2.2% and pay out 35.2% of their earnings in the form of a dividend.

Profitability

This table compares Subsea 7 and its competitors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Subsea 7	2.46%	3.72%	1.98%
Subsea 7 Competitors	-2.53%	-111.39%	-1.88%

Analyst Recommendations

This is a breakdown of current ratings and target prices for Subsea 7 and its competitors, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Subsea 7	0	1	0	0	2.00
Subsea 7 Competitors	452	1309	2434	97	2.51

As a group, “Oil & gas field services, not elsewhere classified” companies have a potential upside of 19.94%. Given Subsea 7’s competitors stronger consensus rating and higher possible upside, analysts plainly believe Subsea 7 has less favorable growth aspects than its competitors.

Earnings & Valuation

This table compares Subsea 7 and its competitors gross revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Subsea 7	$5.97 billion	$15.40 million	30.37
Subsea 7 Competitors	$3.30 billion	$266.09 million	19.80

Subsea 7 has higher revenue, but lower earnings than its competitors. Subsea 7 is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Summary

Subsea 7 competitors beat Subsea 7 on 9 of the 15 factors compared.

Subsea 7 Company Profile

Subsea 7 S.A. delivers offshore projects and services for the 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, commissioning, and installation of subsea umbilicals, risers, and flowlines; inspection, repair, maintenance, remote intervention, and integrity management of subsea infrastructure services; conventional services comprising fabrication, installation, extension, and refurbishment of fixed and floating platforms and associated pipelines in shallow water; and hook-up services. In addition, it operates heavy lifting operations and heavy transportation services for renewables structures; and installs offshore wind turbine 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, as well as engineering and advisory services for customers in the oil and gas, renewables, and utilities industries. The company was incorporated in 1993 and is based in Luxembourg, Luxembourg.