Critical Analysis: Seadrill (NYSE:SDRL) & Tetra Technologies (NYSE:TTI)

Tetra Technologies (NYSE:TTI) and Seadrill (NYSE:SDRL) are both energy companies, but which is the superior business? We will compare the two businesses based on the strength of their valuation, earnings, dividends, risk, profitability, analyst recommendations and institutional ownership.

Valuation and Earnings

This table compares Tetra Technologies and Seadrill”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Tetra Technologies	$630.93 million	1.69	$3.01 million	$0.04	179.75
Seadrill	$1.44 billion	2.06	-$77.00 million	$0.03	1,579.67

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

Profitability

This table compares Tetra Technologies and Seadrill’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Tetra Technologies	0.97%	9.11%	4.14%
Seadrill	0.07%	0.64%	0.46%

Volatility & Risk

Tetra Technologies has a beta of 1.25, meaning that its stock price is 25% more volatile than the S&P 500. Comparatively, Seadrill has a beta of 1.21, meaning that its stock price is 21% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and price targets for Tetra Technologies and Seadrill, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Tetra Technologies	0	2	3	0	2.60
Seadrill	1	2	3	3	2.89

Tetra Technologies presently has a consensus target price of $12.83, indicating a potential upside of 78.49%. Seadrill has a consensus target price of $55.00, indicating a potential upside of 16.06%. Given Tetra Technologies’ higher probable upside, analysts plainly believe Tetra Technologies is more favorable than Seadrill.

Institutional and Insider Ownership

70.2% of Tetra Technologies shares are held by institutional investors. Comparatively, 95.7% of Seadrill shares are held by institutional investors. 6.3% of Tetra Technologies shares are held by company insiders. Comparatively, 0.5% of Seadrill shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Summary

Tetra Technologies beats Seadrill on 8 of the 14 factors compared between the two stocks.

About Tetra Technologies

TETRA Technologies, Inc., together with its subsidiaries, operates as an energy services and solutions company. It operates through two segments, Completion Fluids & Products Division and Water & Flowback Services. The Completion Fluids & Products segment manufactures and markets clear brine fluids, additives, and associated products and services to the oil and gas industry for use in well drilling, completion, and workover operations in the United States, as well as in Latin America, Europe, Asia, the Middle East, and Africa. This segment also markets liquid and dry calcium chloride products; and TETRA PureFlow ultra-pure zinc bromide to battery technology companies. The Water & Flowback Services segment provides water management services for onshore oil and gas operators. This segment also offers frac flowback, production well testing, and other associated services in oil and gas producing regions in the United States, as well as in various basins in Latin America, Africa, Europe, and the Middle East. TETRA Technologies, Inc. was incorporated in 1981 and is headquartered in The Woodlands, Texas.

About Seadrill

Seadrill Ltd. engages in the provision of offshore drilling services to the oil and gas industry. It operates through the following segments: Floaters, Jack-up rigs, and Other. The Floaters segment encompasses drilling, completion, and maintenance of offshore exploration and production wells. the Jack-up Rigs segment includes drilling contracts relate to jack-up rigs for operations in harsh and benign environments in shallow water. The Other segment represents management services to third parties and related parties. The company was founded on May 10, 2005 and is headquartered in Hamilton, Bermuda.