Analyzing Halliburton (HAL) & Forum Energy Technologies (FET)

Halliburton (NYSE: HAL) and Forum Energy Technologies (NYSE:FET) are both energy companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, risk, valuation, dividends, institutional ownership, profitability and analyst recommendations.

Earnings and Valuation

This table compares Halliburton and Forum Energy Technologies’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Halliburton $15.89 billion 2.92 -$5.76 billion $0.24 221.42
Forum Energy Technologies $587.60 million 3.19 -$81.97 million ($1.26) -13.77

Forum Energy Technologies has lower revenue, but higher earnings than Halliburton. Forum Energy Technologies is trading at a lower price-to-earnings ratio than Halliburton, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent ratings and target prices for Halliburton and Forum Energy Technologies, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Halliburton 0 2 22 0 2.92
Forum Energy Technologies 0 12 2 0 2.14

Halliburton presently has a consensus price target of $56.21, indicating a potential upside of 5.78%. Forum Energy Technologies has a consensus price target of $18.08, indicating a potential upside of 4.19%. Given Halliburton’s stronger consensus rating and higher probable upside, equities analysts plainly believe Halliburton is more favorable than Forum Energy Technologies.

Institutional and Insider Ownership

79.8% of Halliburton shares are owned by institutional investors. Comparatively, 95.7% of Forum Energy Technologies shares are owned by institutional investors. 0.5% of Halliburton shares are owned by company insiders. Comparatively, 32.8% of Forum Energy Technologies shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Halliburton and Forum Energy Technologies’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Halliburton 1.13% 6.93% 2.47%
Forum Energy Technologies -16.85% -3.97% -2.63%

Volatility and Risk

Halliburton has a beta of 1.03, indicating that its share price is 3% more volatile than the S&P 500. Comparatively, Forum Energy Technologies has a beta of 1.66, indicating that its share price is 66% more volatile than the S&P 500.

Dividends

Halliburton pays an annual dividend of $0.72 per share and has a dividend yield of 1.4%. Forum Energy Technologies does not pay a dividend. Halliburton pays out 300.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

Halliburton beats Forum Energy Technologies on 9 of the 15 factors compared between the two stocks.

About Halliburton

Halliburton Company provides services and products to the upstream oil and natural gas industry throughout the lifecycle of the reservoir, from locating hydrocarbons and managing geological data, to drilling and formation evaluation, well construction and completion, and optimizing production throughout the life of the field. It operates through two segments: the Completion and Production segment, and the Drilling and Evaluation segment. The Completion and Production segment delivers cementing, stimulation, intervention, pressure control, specialty chemicals, artificial lift and completion services. The Drilling and Evaluation segment provides field and reservoir modeling, drilling, evaluation and wellbore placement solutions that enable customers to model, measure, drill and optimize their well construction activities. It serves national and independent oil and natural gas companies. As of December 31, 2016, it had conducted business in approximately 70 countries around the world.

About Forum Energy Technologies

Forum Energy Technologies, Inc. is an oilfield products company. The Company designs, manufactures and distributes products, and engages in aftermarket services, parts supply and related services. The Company operates through three segments: Drilling & Subsea, Completions, and Production & Infrastructure. The Drilling & Subsea segment designs and manufactures products, and provides related services to the drilling and subsea construction markets. The Completions segment designs, manufactures and supplies products, and provide related services to the well construction, completion, stimulation and intervention markets. The Production & Infrastructure segment designs, manufactures and supplies products, and provides related equipment and services to production and infrastructure markets. Its product offering includes a mix of engineered capital products and replaced items that are used in the exploration, development, production and transportation of oil and natural gas.

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