McDermott International (NYSE: MDR) and Fairmount Santrol (NYSE:FMSA) are both energy companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, risk, valuation, institutional ownership, earnings, analyst recommendations and profitability.
Institutional and Insider Ownership
86.1% of McDermott International shares are owned by institutional investors. Comparatively, 75.3% of Fairmount Santrol shares are owned by institutional investors. 1.3% of McDermott International shares are owned by company insiders. Comparatively, 9.8% of Fairmount Santrol shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
This is a breakdown of current ratings and recommmendations for McDermott International and Fairmount Santrol, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
McDermott International presently has a consensus target price of $7.39, indicating a potential downside of 5.77%. Fairmount Santrol has a consensus target price of $5.95, indicating a potential upside of 1.14%. Given Fairmount Santrol’s stronger consensus rating and higher probable upside, analysts clearly believe Fairmount Santrol is more favorable than McDermott International.
Earnings & Valuation
This table compares McDermott International and Fairmount Santrol’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|McDermott International||$2.64 billion||0.84||$34.11 million||$0.54||14.52|
|Fairmount Santrol||$535.01 million||2.46||-$140.19 million||$0.05||117.60|
McDermott International has higher revenue and earnings than Fairmount Santrol. McDermott International is trading at a lower price-to-earnings ratio than Fairmount Santrol, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
McDermott International has a beta of 1.35, meaning that its share price is 35% more volatile than the S&P 500. Comparatively, Fairmount Santrol has a beta of 2.11, meaning that its share price is 111% more volatile than the S&P 500.
This table compares McDermott International and Fairmount Santrol’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
About McDermott International
McDermott International, Inc. is a provider of integrated engineering, procurement, construction and installation (EPCI), front-end engineering and design (FEED) and module fabrication services for upstream field developments across the world. The Company delivers fixed and floating production facilities, pipeline installations and subsea systems from concept to commissioning for offshore and subsea oil and gas projects. It operates through three segments: the Americas, Europe and Africa (AEA), the Middle East (MEA) and Asia (ASA). As of December 31, 2016, operated in approximately 20 countries across the Americas, Europe, Africa, the Middle East, Asia and Australia, its integrated resources include a diversified fleet of marine vessels, fabrication facilities and engineering offices. It support its activities with project management and procurement services, while utilizing its fully integrated capabilities in both shallow water and deepwater construction.
About Fairmount Santrol
Fairmount Santrol Holdings Inc. is a provider of sand-based proppant solutions. The Company operates through two segments: Proppant Solutions, and Industrial & Recreational (I&R) Products. Its Proppant Solutions segment provides sand-based proppants for use in hydraulic fracturing operations throughout the United States and Canada, Argentina, Mexico, China, northern Europe and the United Arab Emirates. Its I&R segment provides raw, coated, and custom blended sands to the foundry, building products, glass, turf and landscape, and filtration industries in North America. Its asset base includes approximately 800 million tons of proven and probable mineral reserves. As of March 2017, the Company had 10 sand processing facilities with 16.8 million tons of annual sand processing capacity. Its coating facilities include operations in Mexico, Denmark and China, through which it serves international oil and gas markets.
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