Solaris Energy Infrastructure (NASDAQ:SEI) and Drilling Tools International (NASDAQ:DTI) Critical Analysis

Drilling Tools International (NASDAQ:DTI) and Solaris Energy Infrastructure (NASDAQ:SEI) are both small-cap oils/energy companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, dividends, earnings, risk, institutional ownership, profitability and analyst recommendations.

Volatility & Risk

Drilling Tools International has a beta of -0.9, indicating that its share price is 190% less volatile than the S&P 500. Comparatively, Solaris Energy Infrastructure has a beta of 1.45, indicating that its share price is 45% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and target prices for Drilling Tools International and Solaris Energy Infrastructure, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Drilling Tools International	0	1	1	0	2.50
Solaris Energy Infrastructure	0	0	2	0	3.00

Drilling Tools International presently has a consensus price target of $4.25, indicating a potential upside of 29.97%. Solaris Energy Infrastructure has a consensus price target of $30.00, indicating a potential upside of 4.24%. Given Drilling Tools International’s higher possible upside, research analysts clearly believe Drilling Tools International is more favorable than Solaris Energy Infrastructure.

Valuation & Earnings

This table compares Drilling Tools International and Solaris Energy Infrastructure”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Drilling Tools International	$149.79 million	0.76	$14.75 million	$0.28	11.68
Solaris Energy Infrastructure	$280.14 million	6.90	$24.34 million	$0.44	65.41

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

Profitability

This table compares Drilling Tools International and Solaris Energy Infrastructure’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Drilling Tools International	5.46%	15.38%	8.89%
Solaris Energy Infrastructure	4.80%	6.66%	4.12%

Insider and Institutional Ownership

2.8% of Drilling Tools International shares are held by institutional investors. Comparatively, 67.4% of Solaris Energy Infrastructure shares are held by institutional investors. 14.7% of Drilling Tools International shares are held by insiders. Comparatively, 34.7% of Solaris Energy Infrastructure shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Summary

Solaris Energy Infrastructure beats Drilling Tools International on 10 of the 14 factors compared between the two stocks.

About Drilling Tools International

Drilling Tools International Corporation provides oilfield equipment and services to oil and natural gas sectors in North America, Europe, and the Middle East. It offers downhole tool rentals, machining, and inspection services to support the global drilling and wellbore construction industry. The company also provides products are bottom hole assembly components, such as stabilizers, subs, non-magnetic and steel drill collars, hole openers, and roller reamers, as well as drill pipe and drill pipe accessories; ancillary equipment and handling tools to support its rental platform, including float valves, ring gauges, tool baskets, lift bail, lift subs, mud magnets, elevators, bracket and bail assemblies, slips, tongs, stabbing guides and safety clamps; and blowout preventers, and pressure control accessory equipment. In addition, it offers tool rental services, which consists of rental, inspection, machining, and repair services; rents downhole drilling tools used in horizontal and directional drilling of oil and natural gas; rents kellys, pip joints, work strings; maintains a fleet of rental equipment consisting of drill collars, stabilizers, crossover subs, wellbore conditioning tools, drill pipe, hevi-wate drill pipe, and tubing; rents surface control equipment, such as blowout preventers and handling tools; and provides downhole products for producing wells. Drilling Tools International Corporation is headquartered in Houston, Texas.

About Solaris Energy Infrastructure

Solaris Oilfield Infrastructure, Inc. designs and manufactures specialized equipment for oil and natural gas operators in the United States. The company provides mobile proppant and fluid management systems, as well as last mile logistics management services. It offers systems, mobilization, and last mile logistics services that are used to unload, store, and deliver proppant, water and/or chemicals at oil and natural gas well sites. The company is also involved in the transloading and storage of proppant or railcars at its transloading facility. In addition, it develops Railtronix, an inventory management software; and all-electric equipment that automates the low pressure section of oil and gas well completion sites. The company serves exploration and production, and oilfield services industries. Solaris Oilfield Infrastructure, Inc. was founded in 2014 and is headquartered in Houston, Texas.