Critical Survey: Nine Energy Service (NYSE:NINE) and Subsea 7 (OTC:SUBCY)

Nine Energy Service (NYSE:NINE) and Subsea 7 (OTC:SUBCY) are both oils/energy companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, valuation, dividends, analyst recommendations, risk, profitability and earnings.

Profitability

This table compares Nine Energy Service and Subsea 7’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Nine Energy Service	-7.64%	N/A	-11.22%
Subsea 7	2.46%	3.72%	1.98%

Volatility & Risk

Nine Energy Service has a beta of 3.5, indicating that its stock price is 250% more volatile than the S&P 500. Comparatively, Subsea 7 has a beta of 1.71, indicating that its stock price is 71% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and target prices for Nine Energy Service and Subsea 7, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Nine Energy Service	0	0	0	0	0.00
Subsea 7	0	1	0	0	2.00

Insider & Institutional Ownership

57.6% of Nine Energy Service shares are held by institutional investors. Comparatively, 0.0% of Subsea 7 shares are held by institutional investors. 5.5% of Nine Energy Service shares are held by insiders. Comparatively, 1.0% of Subsea 7 shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares Nine Energy Service and Subsea 7″s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Nine Energy Service	$556.75 million	0.09	-$32.21 million	($1.20)	-0.95
Subsea 7	$5.97 billion	0.80	$15.40 million	$0.54	29.22

Subsea 7 has higher revenue and earnings than Nine Energy Service. Nine Energy Service is trading at a lower price-to-earnings ratio than Subsea 7, indicating that it is currently the more affordable of the two stocks.

Summary

Subsea 7 beats Nine Energy Service on 9 of the 12 factors compared between the two stocks.

About Nine Energy Service

Nine Energy Service, Inc. operates as an onshore completion services provider that targets unconventional oil and gas resource development in North American basins and internationally. It offers cementing services, including blending high-grade cement and water with various solid and liquid additives to create a cement slurry that is pumped between the casing and the wellbore of the well. The company also provides open hole and cemented completion tool products, such as liner hangers and accessories, fracture isolation packers, frac sleeves, stage one prep tools, casing flotation tools, specialty open hole float equipment, disk subs, composite cement retainers, and centralizers that provide pinpoint frac sleeve system technologies. In addition, it offers wireline services consisting of plug-and-perf completions, which is a multistage well completion technique for cased-hole wells that consists of deploying perforating guns and isolation tools to a specified depth; and coiled tubing services, which perform wellbore intervention operations utilizing a continuous steel pipe that is transported to the wellsite wound on a large spool. The company was formerly known as NSC-Tripoint, Inc. and changed its name to Nine Energy Service, Inc. in October 2011. Nine Energy Service, Inc. was incorporated in 2011 and is headquartered in Houston, Texas.

About Subsea 7

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.