Critical Review: Halliburton (NYSE:HAL) & Flotek Industries (NYSE:FTK)

Halliburton (NYSE:HAL) and Flotek Industries (NYSE:FTK) are both energy companies, but which is the better business? We will contrast the two businesses based on the strength of their earnings, risk, dividends, institutional ownership, profitability, valuation and analyst recommendations.

Profitability

This table compares Halliburton and Flotek Industries’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Halliburton	9.31%	24.01%	9.81%
Flotek Industries	7.09%	12.76%	8.71%

Institutional and Insider Ownership

85.2% of Halliburton shares are held by institutional investors. Comparatively, 10.9% of Flotek Industries shares are held by institutional investors. 0.6% of Halliburton shares are held by company insiders. Comparatively, 3.0% of Flotek Industries shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Halliburton and Flotek Industries”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Halliburton	$22.94 billion	0.81	$2.50 billion	$2.39	8.99
Flotek Industries	$187.02 million	2.37	$10.50 million	$0.45	32.98

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

Analyst Ratings

This is a summary of recent ratings and price targets for Halliburton and Flotek Industries, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Halliburton	0	7	14	0	2.67
Flotek Industries	0	2	2	1	2.80

Halliburton currently has a consensus price target of $33.53, indicating a potential upside of 56.01%. Flotek Industries has a consensus price target of $14.33, indicating a potential downside of 3.41%. Given Halliburton’s higher probable upside, equities research analysts plainly believe Halliburton is more favorable than Flotek Industries.

Risk and Volatility

Halliburton has a beta of 1.13, suggesting that its share price is 13% more volatile than the S&P 500. Comparatively, Flotek Industries has a beta of 1.36, suggesting that its share price is 36% more volatile than the S&P 500.

Summary

Halliburton beats Flotek Industries on 9 of the 15 factors compared between the two stocks.

About Halliburton

Halliburton Company provides products and services to the energy industry worldwide. It operates through two segments, Completion and Production, and Drilling and Evaluation. The Completion and Production segment offers production enhancement services that include stimulation and sand control services; cementing services, such as well bonding and casing, and casing equipment; and completion tools that offer downhole solutions and services, including well completion products and services, intelligent well completions, and service tools, as well as liner hanger, sand control, and multilateral systems. This segment also provides electrical submersible pumps, as well as artificial lift services; production solutions comprising coiled tubing, hydraulic workover units, downhole tools, and pumping and nitrogen services; pipeline and process services, such as pre-commissioning, commissioning, maintenance, and decommissioning; and specialty chemicals and services. The Drilling and Evaluation segment offers drilling fluid systems, performance additives, completion fluids, solids control, specialized testing equipment, and waste management services; drilling systems and services; wireline and perforating services consists of open-hole logging, and cased-hole and slickline; and drill bits and services comprising roller cone rock bits, fixed cutter bits, hole enlargement, and related downhole tools and services, as well as coring equipment and services. This segment also provides cloud based digital services and artificial intelligence solutions on an open architecture for subsurface insights, integrated well construction, and reservoir and production management; testing and subsea services, such as acquisition and analysis of reservoir information and optimization solutions; and project management and integrated asset management services. Halliburton Company was founded in 1919 and is based in Houston, Texas.

About Flotek Industries

Flotek Industries, Inc. operates as a technology-driven green chemistry and data company that serves customers across industrial and commercial markets in the United States, the United Arab Emirates, and internationally. It operates through two segments: Chemistry Technologies (CT) and Data Analytics (DA). The CT segment designs, develops, manufactures, packages, distributes, delivers, and markets green specialty chemicals that enhance the profitability of hydrocarbon producers, as well as green specialty chemistries, and logistics and technology services. This segment primarily serves integrated oil and gas, oilfield services, independent oil and gas, national and state-owned oil, geothermal energy, solar energy, and alternative energy companies. The DA segment designs, develops, produces, sells, and supports equipment and services that create and provide valuable information on the composition and properties of energy customers' hydrocarbon fluids. It sells its products directly through a mix of in-house sales professionals, as well as contractual agency agreements. Flotek Industries, Inc. was incorporated in 1985 and is headquartered in Houston, Texas.