Critical Analysis: Solaris Energy Infrastructure (NASDAQ:SEI) vs. NOV (NYSE:NOV)

NOV (NYSE:NOV) and Solaris Energy Infrastructure (NASDAQ:SEI) are both oils/energy companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, dividends, earnings, risk, analyst recommendations, valuation and profitability.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for NOV and Solaris Energy Infrastructure, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NOV	2	7	7	1	2.41
Solaris Energy Infrastructure	0	0	2	0	3.00

NOV currently has a consensus target price of $20.14, suggesting a potential upside of 39.20%. Solaris Energy Infrastructure has a consensus target price of $30.00, suggesting a potential upside of 6.42%. Given NOV’s higher probable upside, equities analysts clearly believe NOV is more favorable than Solaris Energy Infrastructure.

Institutional and Insider Ownership

93.3% of NOV shares are held by institutional investors. Comparatively, 67.4% of Solaris Energy Infrastructure shares are held by institutional investors. 1.9% of NOV shares are held by insiders. Comparatively, 34.7% of Solaris Energy Infrastructure shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Risk & Volatility

NOV has a beta of 1.66, suggesting that its stock price is 66% more volatile than the S&P 500. Comparatively, Solaris Energy Infrastructure has a beta of 1.45, suggesting that its stock price is 45% more volatile than the S&P 500.

Earnings and Valuation

This table compares NOV and Solaris Energy Infrastructure”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NOV	$8.91 billion	0.63	$993.00 million	$2.71	5.34
Solaris Energy Infrastructure	$280.14 million	6.75	$24.34 million	$0.44	64.07

NOV has higher revenue and earnings than Solaris Energy Infrastructure. NOV is trading at a lower price-to-earnings ratio than Solaris Energy Infrastructure, indicating that it is currently the more affordable of the two stocks.

Dividends

NOV pays an annual dividend of $0.30 per share and has a dividend yield of 2.1%. Solaris Energy Infrastructure pays an annual dividend of $0.48 per share and has a dividend yield of 1.7%. NOV pays out 11.1% of its earnings in the form of a dividend. Solaris Energy Infrastructure pays out 109.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. NOV is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares NOV and Solaris Energy Infrastructure’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
NOV	12.05%	10.82%	6.09%
Solaris Energy Infrastructure	4.80%	6.66%	4.12%

Summary

NOV beats Solaris Energy Infrastructure on 13 of the 17 factors compared between the two stocks.

About NOV

NOV Inc. designs, constructs, manufactures, and sells systems, components, and products for oil and gas drilling and production, and industrial and renewable energy sectors in the United States and internationally. It operates through two segments, Energy Equipment, and Energy Products and Services. The company provides solids control and waste management equipment and services, managed pressure drilling, drilling fluids, premium drillpipe, wired pipe, drilling optimization services, tubular inspection and coating services, instrumentation, downhole tools, and drill bits. It also offers equipment and technologies for hydraulic fracture stimulation, including downhole multistage fracturing tools, pressure pumping trucks, blenders, sanders, hydration and injection units, flowline, and manifolds; coiled tubing units, and wireline units and tools; connections and liner hangers; onshore production consists of composite pipe, surface transfer and progressive cavity pumps, and artificial lift systems; and offshore production, such as floating production systems and subsea production technologies, as well as manufactures industrial pumps and mixers. In addition, the company provides substructures, derricks, and masts; cranes; jacking systems; pipe lifting, racking, rotating, and assembly systems; mud pumps; pressure control equipment; drives and generators; rig instrumentation and control systems; mooring, anchor, and deck handling machinery; equipment components for offshore wind construction vessels; and pipelay and construction systems. Further, the company offers spare parts, repair, and rentals as well as comprehensive remote equipment monitoring, technical support, field service, and customer training. The company was formerly known as National Oilwell Varco, Inc. and changed its name to NOV Inc. in January 2021. NOV Inc. was founded in 1862 and is based in Houston, Texas.

About Solaris Energy Infrastructure

Solaris Oilfield Infrastructure, Inc. designs and manufactures specialized equipment for oil and natural gas operators in the United States. The company provides mobile proppant and fluid management systems, as well as last mile logistics management services. It offers systems, mobilization, and last mile logistics services that are used to unload, store, and deliver proppant, water and/or chemicals at oil and natural gas well sites. The company is also involved in the transloading and storage of proppant or railcars at its transloading facility. In addition, it develops Railtronix, an inventory management software; and all-electric equipment that automates the low pressure section of oil and gas well completion sites. The company serves exploration and production, and oilfield services industries. Solaris Oilfield Infrastructure, Inc. was founded in 2014 and is headquartered in Houston, Texas.