Dril-Quip (DRQ) & The Competition Critical Review

Dril-Quip (NYSE: DRQ) is one of 14 publicly-traded companies in the “Oil & gas field machinery” industry, but how does it weigh in compared to its peers? We will compare Dril-Quip to similar businesses based on the strength of its institutional ownership, earnings, analyst recommendations, valuation, profitability, dividends and risk.

Analyst Recommendations

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This is a summary of current ratings and target prices for Dril-Quip and its peers, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Dril-Quip 0 7 2 0 2.22
Dril-Quip Competitors 143 878 867 20 2.40

Dril-Quip currently has a consensus price target of $49.00, suggesting a potential upside of 4.48%. As a group, “Oil & gas field machinery” companies have a potential upside of 5.58%. Given Dril-Quip’s peers stronger consensus rating and higher possible upside, analysts plainly believe Dril-Quip has less favorable growth aspects than its peers.

Institutional & Insider Ownership

74.4% of shares of all “Oil & gas field machinery” companies are held by institutional investors. 1.1% of Dril-Quip shares are held by company insiders. Comparatively, 6.7% of shares of all “Oil & gas field machinery” companies are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares Dril-Quip and its peers top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Dril-Quip $455.47 million -$100.63 million 180.38
Dril-Quip Competitors $3.65 billion -$224.01 million 17.78

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

Risk and Volatility

Dril-Quip has a beta of 0.76, suggesting that its stock price is 24% less volatile than the S&P 500. Comparatively, Dril-Quip’s peers have a beta of 0.97, suggesting that their average stock price is 3% less volatile than the S&P 500.

Profitability

This table compares Dril-Quip and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Dril-Quip -22.10% 0.56% 0.53%
Dril-Quip Competitors -7.81% -9.68% -0.43%

Summary

Dril-Quip peers beat Dril-Quip on 9 of the 13 factors compared.

Dril-Quip Company Profile

Dril-Quip, Inc., together with its subsidiaries, designs, manufactures, sells, and services onshore and offshore drilling and production equipment for use in deepwater, harsh environment, and severe service applications worldwide. It operates through three segments: Western Hemisphere, Eastern Hemisphere, and Asia-Pacific. The company's principal products include subsea and surface wellheads, subsea and surface production trees, subsea control systems and manifolds, mudline hanger systems, specialty connectors and associated pipes, drilling and production riser systems, liner hangers, wellhead connectors, diverters, and safety valves, as well as consumable downhole products. It also provides technical advisory services, and rework and reconditioning services, as well as rental and purchase of running tools for use in the installation and retrieval of the its products. The company's products are used to explore for oil and gas from offshore drilling rigs, such as floating rigs and jack-up rigs; and for drilling and production of oil and gas wells on offshore platforms, tension leg platforms, and Spars, as well as moored vessels, such as floating production, storage, and offloading monohull moored vessels. It sells its products directly through its sales personnel, independent sales agents, and representatives to integrated, independent, and foreign national oil and gas companies, as well as drilling contractors, and engineering and construction companies. Dril-Quip, Inc. was founded in 1981 and is headquartered in Houston, Texas.

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