Critical Review: Tetra Technologies (NYSE:TTI) versus Subsea 7 (OTCMKTS:SUBCY)

Subsea 7 (OTCMKTS:SUBCY) and Tetra Technologies (NYSE:TTI) are both energy companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, valuation, institutional ownership, analyst recommendations, profitability, dividends and earnings.

Institutional and Insider Ownership

0.0% of Subsea 7 shares are held by institutional investors. Comparatively, 70.2% of Tetra Technologies shares are held by institutional investors. 1.0% of Subsea 7 shares are held by insiders. Comparatively, 5.7% of Tetra Technologies shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Profitability

This table compares Subsea 7 and Tetra Technologies’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Subsea 7	5.76%	9.46%	5.08%
Tetra Technologies	0.48%	12.56%	5.53%

Risk & Volatility

Subsea 7 has a beta of 1.1, suggesting that its share price is 10% more volatile than the S&P 500. Comparatively, Tetra Technologies has a beta of 1.2, suggesting that its share price is 20% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Subsea 7 and Tetra Technologies, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Subsea 7	0	3	0	0	2.00
Tetra Technologies	0	2	4	0	2.67

Tetra Technologies has a consensus target price of $10.25, suggesting a potential upside of 18.29%. Given Tetra Technologies’ stronger consensus rating and higher probable upside, analysts plainly believe Tetra Technologies is more favorable than Subsea 7.

Valuation & Earnings

This table compares Subsea 7 and Tetra Technologies”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Subsea 7	$7.09 billion	1.21	$411.40 million	$1.38	20.93
Tetra Technologies	$630.93 million	1.84	$3.01 million	$0.02	433.25

Subsea 7 has higher revenue and earnings than Tetra Technologies. Subsea 7 is trading at a lower price-to-earnings ratio than Tetra Technologies, indicating that it is currently the more affordable of the two stocks.

Summary

Tetra Technologies beats Subsea 7 on 10 of the 14 factors compared between the two stocks.

About Subsea 7

Subsea 7 S.A. delivers offshore projects and services for the 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, commissioning, and installation of subsea umbilicals, risers, and flowlines; inspection, repair, maintenance, remote intervention, and integrity management of subsea infrastructure services; conventional services comprising fabrication, installation, extension, and refurbishment of fixed and floating platforms and associated pipelines in shallow water; and hook-up services. In addition, it operates heavy lifting operations and heavy transportation services for renewables structures; and installs offshore wind turbine 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, as well as engineering and advisory services for customers in the oil and gas, renewables, and utilities industries. The company was incorporated in 1993 and is based in Luxembourg, Luxembourg.

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.