Head to Head Analysis: Subsea 7 (SUBCY) & Basic Energy Services (BAS)

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Basic Energy Services (NYSE:BAS) and Subsea 7 (OTCMKTS:SUBCY) are both oils/energy companies, but which is the better business? We will compare the two businesses based on the strength of their valuation, risk, profitability, institutional ownership, earnings, dividends and analyst recommendations.

Insider and Institutional Ownership

98.8% of Basic Energy Services shares are held by institutional investors. Comparatively, 0.1% of Subsea 7 shares are held by institutional investors. 2.0% of Basic Energy Services shares are held by company insiders. Comparatively, 1.0% of Subsea 7 shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Basic Energy Services and Subsea 7, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Basic Energy Services 0 2 2 0 2.50
Subsea 7 1 0 2 0 2.33

Basic Energy Services currently has a consensus target price of $25.43, indicating a potential upside of 182.56%. Given Basic Energy Services’ stronger consensus rating and higher possible upside, research analysts plainly believe Basic Energy Services is more favorable than Subsea 7.

Profitability

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

Net Margins Return on Equity Return on Assets
Basic Energy Services -10.94% -20.44% -8.00%
Subsea 7 5.95% 4.28% 3.21%

Volatility & Risk

Basic Energy Services has a beta of 2.71, suggesting that its stock price is 171% more volatile than the S&P 500. Comparatively, Subsea 7 has a beta of 1.51, suggesting that its stock price is 51% more volatile than the S&P 500.

Valuation and Earnings

This table compares Basic Energy Services 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
Basic Energy Services $864.04 million 0.28 -$96.67 million ($2.33) -3.86
Subsea 7 $3.99 billion 1.08 $454.80 million $1.27 10.32

Subsea 7 has higher revenue and earnings than Basic Energy Services. Basic Energy Services 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 Basic Energy Services on 7 of the 12 factors compared between the two stocks.

Basic Energy Services Company Profile

Basic Energy Services, Inc. provides well site services to oil and natural gas drilling and producing companies in the United States. Its Completion and Remedial Services segment offers pumping services, such as cementing, acidizing, fracturing, nitrogen, and pressure testing; rental and fishing tools; coiled tubing; snubbing services; thru-tubing; cased-hole wireline services; and underbalanced drilling in low pressure and fluid sensitive reservoirs. This segment operates 310 pumping units; and 36 air compressor packages. The company's Fluid Services segment is involved in the transportation of fluids; production of salt water; sale and transportation of fresh and brine water; rental of portable fracturing and test tanks; recycling and treatment of wastewater; operation of fresh water and brine source wells, and non-hazardous wastewater disposal wells; and preparation, construction, and maintenance of access roads, drilling locations, and production facilities. As of December 31, 2017, this segment owned and operated 975 fluid service trucks with an average fluid hauling capacity of up to 150 barrels apiece; and owned 85 salt water disposal facilities. Its Well Servicing segment provides services performed with a mobile well servicing rig and ancillary equipment, such as maintenance work, hoisting tools and equipment required by the operation, and plugging and abandonment services, as well as manufactures and sells workover rigs. As of December 31, 2017, this segment operated a fleet of 310 well servicing rigs. Its Contract Drilling segment employs drilling rigs and related equipment to penetrate the earth to a desired depth and initiate production. This segment owns and operates 11 land drilling rigs. The company was formerly known as Sierra Well Service, Inc. and changed its name to Basic Energy Services, Inc. in 2000. Basic Energy Services, Inc. was founded in 1992 and is headquartered in Fort Worth, Texas.

Subsea 7 Company Profile

Subsea 7 S.A. operates as a seabed-to-surface engineering, construction, and services contractor to the offshore 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, construction, and installation of subsea umbilicals, risers, and flowlines; life of field services, such as inspection, repair, maintenance, integrity management, and remote intervention of subsea infrastructure; conventional services comprising fabrication, installation, extension, and refurbishment of fixed and floating platforms and associated pipelines; hook-up services; and refurbishment of fixed and floating platforms in shallow water. In addition, it operates heavy lifting vessels and oil and gas structures; and installs offshore wind farm 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. It has a fleet of 35 vessels; 2 vessels under construction; and 166 ROVs. Subsea 7 S.A. was incorporated in 1993 and is based in Luxembourg City, Luxembourg.

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