Gulf Island Fabrication (NASDAQ: GIFI) and Frank’s International (NYSE:FI) are both small-cap energy companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, earnings, analyst recommendations, profitability, institutional ownership, valuation and risk.

Dividends

Gulf Island Fabrication pays an annual dividend of $0.04 per share and has a dividend yield of 0.3%. Frank’s International pays an annual dividend of $0.30 per share and has a dividend yield of 4.6%. Gulf Island Fabrication pays out -2.5% of its earnings in the form of a dividend. Frank’s International pays out -56.6% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Frank’s International is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a breakdown of current recommendations for Gulf Island Fabrication and Frank’s International, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Gulf Island Fabrication 0 0 0 0 N/A
Frank’s International 3 9 1 0 1.85

Frank’s International has a consensus target price of $7.67, indicating a potential upside of 18.31%. Given Frank’s International’s higher probable upside, analysts clearly believe Frank’s International is more favorable than Gulf Island Fabrication.

Earnings & Valuation

This table compares Gulf Island Fabrication and Frank’s International’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Gulf Island Fabrication $286.33 million 0.68 $3.51 million ($1.62) -8.12
Frank’s International $487.53 million 2.97 -$135.33 million ($0.53) -12.23

Gulf Island Fabrication has higher earnings, but lower revenue than Frank’s International. Frank’s International is trading at a lower price-to-earnings ratio than Gulf Island Fabrication, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Gulf Island Fabrication and Frank’s International’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Gulf Island Fabrication -6.23% -5.07% -4.08%
Frank’s International -26.21% -9.25% -7.80%

Volatility and Risk

Gulf Island Fabrication has a beta of 0.84, indicating that its stock price is 16% less volatile than the S&P 500. Comparatively, Frank’s International has a beta of 1.1, indicating that its stock price is 10% more volatile than the S&P 500.

Insider and Institutional Ownership

63.7% of Gulf Island Fabrication shares are held by institutional investors. Comparatively, 31.5% of Frank’s International shares are held by institutional investors. 3.4% of Gulf Island Fabrication shares are held by company insiders. Comparatively, 77.9% of Frank’s International shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Summary

Frank’s International beats Gulf Island Fabrication on 9 of the 15 factors compared between the two stocks.

About Gulf Island Fabrication

Gulf Island Fabrication, Inc. (Gulf Island) is a holding company. The Company, along with its subsidiaries, is a fabricator of steel platforms and other specialized structures for customers in the offshore oil and gas industry. It also performs onshore and offshore construction and fabrication services for customers in the marine industry. Its primary activity is the fabrication of offshore drilling and production platforms and other steel structures for customers in the oil and gas and marine industries, including jackets and deck sections of fixed production platforms, hull, tendon, and/or deck sections of floating production platforms, piles, wellhead protectors. It conducts its operations through its subsidiaries, which include Gulf Island, L.L.C.; Gulf Marine Fabricators, L.P.; Gulf Island Marine Fabricators, L.L.C.; Gulf Island Shipyards, L.L.C.; Dolphin Services, L.L.C.; and Dolphin Steel Sales, L.L.C.

About Frank’s International

Frank’s International N.V. (FINV) is a provider of engineered tubular services, tubular fabrication and specialty well construction and well intervention solutions to the oil and gas industry. The Company operates through four business segments: International Services, U. S. Services, Tubular Sales and Blackhawk. As of December 31, 2016, the International Services segment provided tubular services in international offshore markets and in several onshore international regions in approximately 60 countries on six continents. The U.S. Services segment provides tubular services. The Blackhawk segment provides well construction and well intervention rental equipment, services and products, in addition to the cementing tool expertise, in the United States and Mexican Gulf of Mexico, onshore United States and other select international locations.

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