Critical Review: Cactus (NYSE:WHD) and Tetra Technologies (NYSE:TTI)

Tetra Technologies (NYSE:TTI) and Cactus (NYSE:WHD) are both energy companies, but which is the superior business? We will contrast the two companies based on the strength of their analyst recommendations, profitability, dividends, risk, valuation, earnings and institutional ownership.

Valuation and Earnings

This table compares Tetra Technologies and Cactus”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Tetra Technologies	$630.93 million	1.43	$3.01 million	$0.04	152.60
Cactus	$1.08 billion	4.78	$166.01 million	$1.17	55.01

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

Profitability

This table compares Tetra Technologies and Cactus’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Tetra Technologies	0.97%	9.11%	4.14%
Cactus	6.01%	16.66%	10.81%

Institutional & Insider Ownership

70.2% of Tetra Technologies shares are held by institutional investors. Comparatively, 85.1% of Cactus shares are held by institutional investors. 6.3% of Tetra Technologies shares are held by company insiders. Comparatively, 12.9% of Cactus shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Risk and Volatility

Tetra Technologies has a beta of 1.23, meaning that its stock price is 23% more volatile than the S&P 500. Comparatively, Cactus has a beta of 1.37, meaning that its stock price is 37% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Tetra Technologies and Cactus, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Tetra Technologies	0	2	3	0	2.60
Cactus	0	4	3	0	2.43

Tetra Technologies presently has a consensus target price of $11.17, suggesting a potential upside of 82.94%. Cactus has a consensus target price of $66.80, suggesting a potential upside of 3.80%. Given Tetra Technologies’ stronger consensus rating and higher probable upside, analysts clearly believe Tetra Technologies is more favorable than Cactus.

Summary

Cactus beats Tetra Technologies on 10 of the 13 factors compared between the two stocks.

About Tetra Technologies

TETRA Technologies, Inc., together with its subsidiaries, operates as an energy services and solutions company. It operates through two segments, Completion Fluids & Products Division and Water & Flowback Services. The Completion Fluids & Products segment manufactures and markets clear brine fluids, additives, and associated products and services to the oil and gas industry for use in well drilling, completion, and workover operations in the United States, as well as in Latin America, Europe, Asia, the Middle East, and Africa. This segment also markets liquid and dry calcium chloride products; and TETRA PureFlow ultra-pure zinc bromide to battery technology companies. The Water & Flowback Services segment provides water management services for onshore oil and gas operators. This segment also offers frac flowback, production well testing, and other associated services in oil and gas producing regions in the United States, as well as in various basins in Latin America, Africa, Europe, and the Middle East. TETRA Technologies, Inc. was incorporated in 1981 and is headquartered in The Woodlands, Texas.

About Cactus

Cactus, Inc., together with its subsidiaries, designs, manufactures, sells, and leases pressure control and spoolable pipes in the United States, Australia, Canada, the Middle East, and internationally. It operates through two segments, Pressure Control and Spoolable Technologies. The Pressure Control segment designs, manufactures, sells, and rents a range of wellhead and pressure control equipment under the Cactus Wellhead brand name through service centers. Its products are sold and rented primarily for onshore unconventional oil and gas wells for drilling, completion, and production phases of the wells. This segment also provides field services to install, maintain, and handle the equipment. The Spoolable Technologies segment designs, manufactures, and sells spoolable pipes and associated end fittings under the FlexSteel brand name. Its products are primarily used to transport oil, gas, and other liquids. This segment also provides field services and rental items through service centers and pipe yards, as well as offers equipment and services internationally. In addition, the company offers repair and refurbishment services. Cactus, Inc. was founded in 2011 and is headquartered in Houston, Texas.