Analyzing Subsea 7 (OTC:SUBCY) and RPC (NYSE:RES)

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

Dividends

Subsea 7 pays an annual dividend of $0.54 per share and has a dividend yield of 3.5%. RPC pays an annual dividend of $0.16 per share and has a dividend yield of 2.9%. Subsea 7 pays out 80.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. RPC pays out 37.2% of its earnings in the form of a dividend.

Profitability

This table compares Subsea 7 and RPC’s 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%
RPC	6.46%	8.62%	6.85%

Valuation and Earnings

This table compares Subsea 7 and RPC”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Subsea 7	$5.97 billion	0.77	$15.40 million	$0.67	22.78
RPC	$1.41 billion	0.85	$91.44 million	$0.43	12.97

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

Risk & Volatility

Subsea 7 has a beta of 1.71, suggesting that its stock price is 71% more volatile than the S&P 500. Comparatively, RPC has a beta of 1.58, suggesting that its stock price is 58% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Subsea 7 and RPC, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Subsea 7	0	1	0	0	2.00
RPC	1	2	0	0	1.67

RPC has a consensus price target of $6.17, suggesting a potential upside of 10.61%. Given RPC’s higher possible upside, analysts plainly believe RPC is more favorable than Subsea 7.

Institutional and Insider Ownership

0.0% of Subsea 7 shares are held by institutional investors. Comparatively, 41.1% of RPC shares are held by institutional investors. 1.0% of Subsea 7 shares are held by insiders. Comparatively, 60.4% of RPC 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.

Summary

RPC beats Subsea 7 on 9 of the 15 factors compared between the two stocks.

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.

About RPC

RPC, Inc., through its subsidiaries, engages provision of a range of oilfield services and equipment for the oil and gas companies involved in the exploration, production, and development of oil and gas properties. The company operates through Technical Services and Support Services segments. The Technical Services segment offers pressure pumping, fracturing, acidizing, cementing, downhole tools, coiled tubing, snubbing, nitrogen, well control, wireline, pump down, and fishing services that are used in the completion, production, and maintenance of oil and gas wells. The Support Services segment provides a range of rental tools for onshore and offshore oil and gas well drilling, completion, and workover activities. This segment also offers oilfield pipe inspection, and pipe management and storage services, as well as well control training and consulting services. It operates in the United States, Africa, Canada, Argentina, China, Mexico, Latin America, the Middle East, and internationally. The company was incorporated in 1984 and is headquartered in Atlanta, Georgia.