Critical Comparison: Valaris (NYSE:VAL) vs. Tetra Technologies (NYSE:TTI)

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

Insider and Institutional Ownership

70.2% of Tetra Technologies shares are held by institutional investors. Comparatively, 96.7% of Valaris shares are held by institutional investors. 6.3% of Tetra Technologies shares are held by insiders. Comparatively, 0.8% of Valaris shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent ratings and price targets for Tetra Technologies and Valaris, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Tetra Technologies	0	2	3	0	2.60
Valaris	1	6	0	0	1.86

Tetra Technologies presently has a consensus price target of $11.50, indicating a potential upside of 74.03%. Valaris has a consensus price target of $66.60, indicating a potential downside of 24.36%. Given Tetra Technologies’ stronger consensus rating and higher possible upside, analysts plainly believe Tetra Technologies is more favorable than Valaris.

Volatility and Risk

Tetra Technologies has a beta of 1.23, suggesting that its stock price is 23% more volatile than the S&P 500. Comparatively, Valaris has a beta of 0.93, suggesting that its stock price is 7% less volatile than the S&P 500.

Earnings and Valuation

This table compares Tetra Technologies and Valaris”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Tetra Technologies	$630.93 million	1.55	$3.01 million	$0.04	165.20
Valaris	$2.37 billion	2.58	$982.80 million	$13.39	6.58

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

Profitability

This table compares Tetra Technologies and Valaris’ 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%
Valaris	43.95%	9.25%	5.35%

Summary

Valaris beats Tetra Technologies 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 Valaris

Valaris Limited, together with its subsidiaries, provides offshore contract drilling services Gulf of Mexico, South America, North Sea, the Middle East, Africa, and the Asia Pacific. The company operates through four segments: Floaters, Jackups, ARO, and Other. It owns an offshore drilling rig fleet, which include drillships, dynamically positioned semisubmersible rigs, moored semisubmersible rig, and jackup rigs. It serves international, government-owned, and independent oil and gas. Valaris Limited was founded in 1975 and is based in Hamilton, Bermuda.