Natural Gas Services Group (NYSE: NGS) and Tesco Corporation (NASDAQ:TESO) are both small-cap oils/energy companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, profitability, analyst recommendations, institutional ownership, earnings, risk and valuation.

Valuation and Earnings

This table compares Natural Gas Services Group and Tesco Corporation’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Natural Gas Services Group $68.00 million 4.49 $25.46 million $0.26 90.77
Tesco Corporation $142.59 million 1.28 -$34.72 million ($1.46) -2.67

Natural Gas Services Group has higher revenue, but lower earnings than Tesco Corporation. Tesco Corporation 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.

Volatility and Risk

Natural Gas Services Group has a beta of 1.23, indicating that its share price is 23% more volatile than the S&P 500. Comparatively, Tesco Corporation has a beta of 1.21, indicating that its share price is 21% more volatile than the S&P 500.

Institutional & Insider Ownership

88.2% of Natural Gas Services Group shares are held by institutional investors. Comparatively, 95.7% of Tesco Corporation shares are held by institutional investors. 6.9% of Natural Gas Services Group shares are held by insiders. Comparatively, 1.7% of Tesco Corporation shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Profitability

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

Net Margins Return on Equity Return on Assets
Natural Gas Services Group 4.85% 1.41% 1.13%
Tesco Corporation -47.72% -18.21% -16.32%

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Natural Gas Services Group and Tesco Corporation, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Natural Gas Services Group 0 0 2 0 3.00
Tesco Corporation 1 2 3 0 2.33

Natural Gas Services Group currently has a consensus target price of $35.50, suggesting a potential upside of 50.42%. Tesco Corporation has a consensus target price of $7.00, suggesting a potential upside of 79.49%. Given Tesco Corporation’s higher possible upside, analysts clearly believe Tesco Corporation is more favorable than Natural Gas Services Group.

Summary

Natural Gas Services Group beats Tesco Corporation on 9 of the 13 factors compared between the two stocks.

Natural Gas Services Group Company Profile

Natural Gas Services Group, Inc. is a provider of small to medium horsepower compression equipment to the natural gas industry. The Company focuses primarily on the non-conventional natural gas and oil production business in the United States, such as coal bed methane, gas shale, tight gas and oil shales. The Company manufactures, fabricates and rents natural gases compressors that enhance the production of natural gas wells and provides maintenance services for its natural gas compressors. In addition, it sells custom fabricated natural gas compressors to meet customer specifications dictated by well pressures, production characteristics and particular applications. It also manufactures and sells flare systems for oil and gas plant and production facilities. The Company’s operating units include Gas Compressor Rental, Engineered Equipment Sales, Service and Maintenance, and Corporate.

Tesco Corporation Company Profile

Tesco Corporation is a provider of technology-based solutions for drilling, servicing and completion of wells for the upstream energy industry. The Company’s operations consist of top drives and automated pipe handling equipment sales and rentals; aftermarket sales and services, and tubular services, including related products and accessories sales. Its segments include Products, Tubular Services, Research and Engineering, and Corporate and Other. The Products segment includes top drives and automated pipe handling equipment sales, rentals and aftermarket sales and services. The Tubular Services segment includes onshore and offshore tubular services and sales of related products and accessories. The Research and Engineering segment includes internal research, engineering, and development activities related to its products and tubular services. The Corporate and Other segment includes executive management and various global support and compliance functions.

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