Financial Review: Subsea 7 (SUBCY) & Its Rivals

Subsea 7 (OTCMKTS: SUBCY) is one of 30 public companies in the “Oil & gas field services, not elsewhere classified” industry, but how does it weigh in compared to its rivals? We will compare Subsea 7 to similar businesses based on the strength of its institutional ownership, dividends, risk, analyst recommendations, valuation, earnings and profitability.

Valuation and Earnings

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This table compares Subsea 7 and its rivals top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Subsea 7 $3.57 billion $436.00 million 8.68
Subsea 7 Competitors $3.83 billion $63.66 million -6.25

Subsea 7’s rivals have higher revenue, but lower earnings than Subsea 7. Subsea 7 is trading at a higher price-to-earnings ratio than its rivals, indicating that it is currently more expensive than other companies in its industry.

Dividends

Subsea 7 pays an annual dividend of $0.58 per share and has a dividend yield of 4.5%. Subsea 7 pays out 39.2% of its earnings in the form of a dividend. As a group, “Oil & gas field services, not elsewhere classified” companies pay a dividend yield of 3.1% and pay out 182.8% of their earnings in the form of a dividend. Subsea 7 is clearly a better dividend stock than its rivals, given its higher yield and lower payout ratio.

Profitability

This table compares Subsea 7 and its rivals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Subsea 7 10.29% 7.82% 5.47%
Subsea 7 Competitors -4.65% -0.24% -1.17%

Insider & Institutional Ownership

0.1% of Subsea 7 shares are owned by institutional investors. Comparatively, 60.3% of shares of all “Oil & gas field services, not elsewhere classified” companies are owned by institutional investors. 1.0% of Subsea 7 shares are owned by insiders. Comparatively, 18.7% of shares of all “Oil & gas field services, not elsewhere classified” companies are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Subsea 7 and its rivals, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Subsea 7 2 1 0 0 1.33
Subsea 7 Competitors 235 1118 1700 75 2.52

As a group, “Oil & gas field services, not elsewhere classified” companies have a potential upside of 29.83%. Given Subsea 7’s rivals stronger consensus rating and higher possible upside, analysts clearly believe Subsea 7 has less favorable growth aspects than its rivals.

Risk and Volatility

Subsea 7 has a beta of 1.53, indicating that its share price is 53% more volatile than the S&P 500. Comparatively, Subsea 7’s rivals have a beta of 1.38, indicating that their average share price is 38% more volatile than the S&P 500.

Summary

Subsea 7 beats its rivals on 8 of the 15 factors compared.

About Subsea 7

Subsea 7 S.A. operates as a seabed-to-surface engineering, construction, and services contractor to the offshore 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, construction, and installation of subsea umbilicals, risers, and flowlines; life of field services, such as inspection, repair, maintenance, integrity management, and remote intervention of subsea infrastructure; conventional services comprising fabrication, installation, extension, and refurbishment of fixed and floating platforms and associated pipelines; hook-up services; and refurbishment of fixed and floating platforms in shallow water. In addition, it operates heavy lifting vessels and oil and gas structures; and installs offshore wind farm 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. It has a fleet of 35 vessels; 2 vessels under construction; and 166 ROVs. Subsea 7 S.A. was incorporated in 1993 and is based in Luxembourg, Luxembourg.

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