Newpark Resources (NR) and Halliburton (HAL) Critical Survey

Newpark Resources (NYSE: NR) and Halliburton (NYSE:HAL) are both oils/energy companies, but which is the superior business? We will compare the two businesses based on the strength of their risk, valuation, profitability, analyst recommendations, earnings, institutional ownership and dividends.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Newpark Resources and Halliburton, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Newpark Resources 0 1 3 0 2.75
Halliburton 0 2 23 0 2.92

Newpark Resources currently has a consensus price target of $10.00, suggesting a potential upside of 18.34%. Halliburton has a consensus price target of $56.85, suggesting a potential upside of 25.89%. Given Halliburton’s stronger consensus rating and higher probable upside, analysts clearly believe Halliburton is more favorable than Newpark Resources.

Profitability

This table compares Newpark Resources and Halliburton’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Newpark Resources 0.48% -0.29% -0.17%
Halliburton 1.13% 6.93% 2.47%

Earnings and Valuation

This table compares Newpark Resources and Halliburton’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Newpark Resources $471.50 million 1.54 -$40.71 million $0.04 211.30
Halliburton $15.89 billion 2.48 -$5.76 billion $0.24 188.17

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

Dividends

Halliburton pays an annual dividend of $0.72 per share and has a dividend yield of 1.6%. Newpark Resources 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.

Institutional & Insider Ownership

80.0% of Halliburton shares are held by institutional investors. 4.9% of Newpark Resources shares are held by company insiders. Comparatively, 0.5% of Halliburton shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Risk & Volatility

Newpark Resources has a beta of 1.58, suggesting that its share price is 58% more volatile than the S&P 500. Comparatively, Halliburton has a beta of 1.03, suggesting that its share price is 3% more volatile than the S&P 500.

Summary

Halliburton beats Newpark Resources on 11 of the 15 factors compared between the two stocks.

About Newpark Resources

Newpark Resources, Inc. is a supplier providing products and services primarily to the oil and gas exploration and production (E&P) industry. The Company’s segments include Fluids Systems, and Mats and Integrated Services. The Fluids Systems segment provides drilling fluids products and technical services to customers in the North America; Europe, the Middle East and Africa; Latin America, and Asia Pacific regions. The Mats and Integrated Services segment provides composite mat rentals, as well as location construction and related site services, to customers at well, production, transportation and refinery locations in the United States. It manufactures and sells composite mats to customers outside of the United States, and to domestic customers outside of the oil and gas exploration market. The Fluids Systems segment offers customized solutions for technical drilling projects involving subsurface conditions, such as horizontal, directional, geologically deep or deep water drilling.

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.

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