Comparing SLB (NYSE:SLB) and TechnipFMC (NYSE:FTI)

TechnipFMC (NYSE:FTI) and SLB (NYSE:SLB) are both large-cap energy companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, risk, analyst recommendations, institutional ownership, dividends, valuation and profitability.

Insider and Institutional Ownership

96.6% of TechnipFMC shares are held by institutional investors. Comparatively, 82.0% of SLB shares are held by institutional investors. 1.4% of TechnipFMC shares are held by insiders. Comparatively, 0.2% of SLB shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of current recommendations for TechnipFMC and SLB, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
TechnipFMC	0	4	13	0	2.76
SLB	1	3	18	2	2.88

TechnipFMC presently has a consensus price target of $69.64, indicating a potential downside of 2.99%. SLB has a consensus price target of $59.80, indicating a potential upside of 25.22%. Given SLB’s stronger consensus rating and higher probable upside, analysts clearly believe SLB is more favorable than TechnipFMC.

Valuation & Earnings

This table compares TechnipFMC and SLB”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
TechnipFMC	$10.19 billion	2.81	$963.90 million	$2.62	27.40
SLB	$35.71 billion	2.00	$3.37 billion	$2.29	20.85

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

Profitability

This table compares TechnipFMC and SLB’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
TechnipFMC	10.62%	34.06%	11.30%
SLB	9.26%	15.54%	7.51%

Dividends

TechnipFMC pays an annual dividend of $0.20 per share and has a dividend yield of 0.3%. SLB pays an annual dividend of $1.18 per share and has a dividend yield of 2.5%. TechnipFMC pays out 7.6% of its earnings in the form of a dividend. SLB pays out 51.5% 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. TechnipFMC has raised its dividend for 1 consecutive years and SLB has raised its dividend for 5 consecutive years. SLB is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility & Risk

TechnipFMC has a beta of 0.7, meaning that its share price is 30% less volatile than the S&P 500. Comparatively, SLB has a beta of 0.72, meaning that its share price is 28% less volatile than the S&P 500.

About TechnipFMC

TechnipFMC plc engages in the energy projects, technologies, and systems and services businesses in Europe, Central Asia, North America, Latin America, the Asia Pacific, Africa, the Middle East, and internationally. It operates through two segments: Subsea and Surface Technologies. The Subsea segment engages in the design, engineering, procurement, manufacturing, fabrication, installation, and life of field services for subsea systems, subsea field infrastructure, and subsea pipe systems used in oil and gas production and transportation. It provides subsea production and processing system; flexible pipe; subsea umbilicals, risers, and flowlines; vessels; robotics; well and asset services; and Subsea Studio for optimizing the development, execution, and operation of current and future subsea fields. The Surface Technologies segment designs, manufactures, and services products and systems used in land and shallow water exploration and production of crude oil and natural gas. This segment offers drilling; surface wellheads and production trees systems; iComplete, a pressure control system; fracturing tree and manifold systems; flexible pipes; safety and integrity systems, multiphase meter modules, in-line separation and processing systems, and standard pumps; well control and integrity systems; separation and processing systems; skid systems; and flow measurement and automation solutions. It also offers planning, testing and installation, commissioning, operations, replacement and upgrade, maintenance, storage, preservation, intervention, integrity, decommissioning, and abandonment; and supplies flowline products and services. TechnipFMC plc was founded in 1884 and is headquartered in Houston, Texas.

About SLB

Schlumberger Limited engages in the provision of technology for the energy industry worldwide. The company operates through four divisions: Digital & Integration, Reservoir Performance, Well Construction, and Production Systems. The company provides field development and hydrocarbon production, carbon management, and integration of adjacent energy systems; reservoir interpretation and data processing services for exploration data; and well construction and production improvement services and products. It also offers subsurface geology and fluids evaluation information; open and cased hole services; exploration and production pressure, and flow-rate measurement services; and pressure pumping, well stimulation, and coiled tubing equipment solutions. In addition, the company offers mud logging, directional drilling, measurement-while-drilling, and logging-while-drilling services, as well as engineering support services; supplies drilling fluid systems; designs, manufactures, and markets roller cone and fixed cutter drill bits; bottom-hole-assembly and borehole enlargement technologies; well cementing products and services; well planning, well drilling, engineering, supervision, logistics, procurement, and contracting of third parties, as well as drilling rig management solutions; and drilling equipment and services, as well as land drilling rigs and related services. Further, it provides artificial lift production equipment and optimization services; supplies packers, safety valves, sand control technology, and various intelligent well completions technology and equipment; designs and manufactures valves, chokes, actuators, and surface trees; and OneSubsea, an integrated solutions, products, systems, and services, including wellheads, subsea trees, manifolds and flowline connectors, control systems, connectors, and services. The company was formerly known as Socie´te´ de Prospection E´lectrique. Schlumberger Limited was founded in 1926 and is based in Houston, Texas.