NOV (NYSE:NOV) & Natural Gas Services Group (NYSE:NGS) Critical Analysis

Natural Gas Services Group (NYSE:NGS) and NOV (NYSE:NOV) are both energy companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, valuation, profitability, institutional ownership, risk, dividends and earnings.

Profitability

This table compares Natural Gas Services Group and NOV’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Natural Gas Services Group	10.53%	6.99%	3.57%
NOV	6.68%	9.11%	5.19%

Volatility & Risk

Natural Gas Services Group has a beta of 0.66, suggesting that its stock price is 34% less volatile than the S&P 500. Comparatively, NOV has a beta of 1.28, suggesting that its stock price is 28% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations for Natural Gas Services Group and NOV, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Natural Gas Services Group	0	0	1	1	3.50
NOV	3	8	8	0	2.26

Natural Gas Services Group currently has a consensus target price of $32.50, suggesting a potential upside of 35.58%. NOV has a consensus target price of $17.31, suggesting a potential upside of 36.16%. Given NOV’s higher probable upside, analysts clearly believe NOV is more favorable than Natural Gas Services Group.

Earnings & Valuation

This table compares Natural Gas Services Group and NOV”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Natural Gas Services Group	$156.74 million	1.92	$17.23 million	$1.35	17.76
NOV	$8.87 billion	0.54	$635.00 million	$1.50	8.48

NOV has higher revenue and earnings than Natural Gas Services Group. NOV is trading at a lower price-to-earnings ratio than Natural Gas Services Group, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

65.6% of Natural Gas Services Group shares are held by institutional investors. Comparatively, 93.3% of NOV shares are held by institutional investors. 5.1% of Natural Gas Services Group shares are held by company insiders. Comparatively, 2.1% of NOV shares are held 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.

Summary

NOV beats Natural Gas Services Group on 9 of the 15 factors compared between the two stocks.

About Natural Gas Services Group

Natural Gas Services Group, Inc. provides natural gas compression equipment and services to the energy industry in the United States. It engineers and fabricates, operates, rents, and maintains natural gas compressors for oil and natural gas production and plant facilities. It also designs, fabricates, and assembles compressor units for rental or sale; and designs, manufactures, and sells a line of reciprocating natural gas compressor frames, cylinders, and parts. In addition, the company offers flare stacks and related ignition and control devices for the onshore and offshore incineration of gas compounds, such as hydrogen sulfide, carbon dioxide, natural gas, and liquefied petroleum gases. Further, it provides aftermarket services for its compressor and flare sales business; and exchange and rebuild program for small horsepower screw compressors. It markets its products to exploration and production companies that utilize compressor units for artificial lift applications; and oil and natural gas exploration and production companies. Natural Gas Services Group, Inc. was incorporated in 1998 and is headquartered in Midland, Texas.

About NOV

NOV Inc. designs, constructs, manufactures, and sells systems, components, and products for oil and gas drilling and production, and industrial and renewable energy sectors in the United States and internationally. It operates through two segments, Energy Equipment, and Energy Products and Services. The company provides solids control and waste management equipment and services, managed pressure drilling, drilling fluids, premium drillpipe, wired pipe, drilling optimization services, tubular inspection and coating services, instrumentation, downhole tools, and drill bits. It also offers equipment and technologies for hydraulic fracture stimulation, including downhole multistage fracturing tools, pressure pumping trucks, blenders, sanders, hydration and injection units, flowline, and manifolds; coiled tubing units, and wireline units and tools; connections and liner hangers; onshore production consists of composite pipe, surface transfer and progressive cavity pumps, and artificial lift systems; and offshore production, such as floating production systems and subsea production technologies, as well as manufactures industrial pumps and mixers. In addition, the company provides substructures, derricks, and masts; cranes; jacking systems; pipe lifting, racking, rotating, and assembly systems; mud pumps; pressure control equipment; drives and generators; rig instrumentation and control systems; mooring, anchor, and deck handling machinery; equipment components for offshore wind construction vessels; and pipelay and construction systems. Further, the company offers spare parts, repair, and rentals as well as comprehensive remote equipment monitoring, technical support, field service, and customer training. The company was formerly known as National Oilwell Varco, Inc. and changed its name to NOV Inc. in January 2021. NOV Inc. was founded in 1862 and is based in Houston, Texas.