Critical Review: MRC Global (NYSE:MRC) & Perma-Pipe International (NASDAQ:PPIH)

MRC Global (NYSE:MRC) and Perma-Pipe International (NASDAQ:PPIH) are both small-cap industrials companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, valuation, profitability, risk, dividends, earnings and analyst recommendations.

Analyst Ratings

This is a summary of current ratings and price targets for MRC Global and Perma-Pipe International, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MRC Global	0	0	3	0	3.00
Perma-Pipe International	0	0	0	0	0.00

MRC Global presently has a consensus target price of $15.3333, suggesting a potential upside of 6.78%. Given MRC Global’s stronger consensus rating and higher possible upside, equities analysts plainly believe MRC Global is more favorable than Perma-Pipe International.

Institutional & Insider Ownership

95.0% of MRC Global shares are held by institutional investors. Comparatively, 28.4% of Perma-Pipe International shares are held by institutional investors. 2.0% of MRC Global shares are held by company insiders. Comparatively, 6.0% of Perma-Pipe International shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Volatility and Risk

MRC Global has a beta of 1.65, suggesting that its share price is 65% more volatile than the S&P 500. Comparatively, Perma-Pipe International has a beta of 0.46, suggesting that its share price is 54% less volatile than the S&P 500.

Profitability

This table compares MRC Global and Perma-Pipe International’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
MRC Global	0.47%	12.82%	3.96%
Perma-Pipe International	7.31%	17.84%	7.81%

Valuation and Earnings

This table compares MRC Global and Perma-Pipe International”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
MRC Global	$3.01 billion	0.41	$55.00 million	($0.11)	-130.55
Perma-Pipe International	$158.38 million	1.27	$8.98 million	$1.54	16.31

MRC Global has higher revenue and earnings than Perma-Pipe International. MRC Global is trading at a lower price-to-earnings ratio than Perma-Pipe International, indicating that it is currently the more affordable of the two stocks.

About MRC Global

MRC Global Inc., through its subsidiaries, distributes pipes, valves, fittings, and other infrastructure products and services in the United States, Canada, and internationally. It offers ball, butterfly, gate, globe, check, diaphragm, needle, and plug valves; other products, such as lined corrosion resistant piping systems, control valves, valve automation, and top work components; and valve modification services, including valve control extensions, welding, hydrotesting, painting, coating, x-raying, and actuation assembly. The company also provides carbon steel fittings and flanges comprising carbon weld fittings, flanges, and piping components; stainless steel, alloy and corrosion resistant pipes, tubing, fittings, and flanges; and carbon line pipes. In addition, it offers natural gas distribution products, including risers, meters, polyethylene pipes and fittings, and various other components and industrial supplies; oilfield and industrial supplies and completion equipment, such as high density polyethylene pipes, fittings, and rods; and specialized production equipment comprising tanks and separators. Further, the company provides various services under the ValidTorque and FastTrack names. Its products are used in the construction, maintenance, repair, and overhaul of equipment used in extreme operating conditions, including high pressure, high/low temperature, and high corrosive and abrasive environments. The company was formerly known as McJunkin Red Man Holding Corporation and changed its name to MRC Global Inc. in January 2012. MRC Global Inc. was founded in 1921 and is headquartered in Houston, Texas.

About Perma-Pipe International

Perma-Pipe International Holdings, Inc., together with its subsidiaries, engineers, designs, manufactures, and sells specialty piping and leak detection systems. It offers insulated and jacketed district heating and cooling piping systems for energy distribution from central energy plants to various locations; and primary and secondary containment piping systems for transporting chemicals, hazardous fluids, and petroleum products, as well as engages in the coating and insulation of oil and gas gathering and transmission pipelines. The company also offers liquid and powder based anti-corrosion coatings for external and internal surfaces of steel pipe, including shapes like bends, reducers, tees, and other spools/fittings that is used in pipelines for the transportation of oil and gas products and potable water. It has operations in the United States, Canada, the Middle East, North Africa, Europe, India, and internationally. The company was formerly known as MFRI, Inc. and changed its name to Perma-Pipe International Holdings, Inc. in March 2017. Perma-Pipe International Holdings, Inc. was incorporated in 1993 and is headquartered in Spring, Texas.