Helmerich & Payne (NYSE:HP) vs. Halliburton (NYSE:HAL) Financial Analysis

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

Profitability

This table compares Helmerich & Payne and Halliburton’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Helmerich & Payne	-3.43%	-2.35%	-0.99%
Halliburton	7.16%	18.71%	7.89%

Volatility and Risk

Helmerich & Payne has a beta of 0.69, suggesting that its stock price is 31% less volatile than the S&P 500. Comparatively, Halliburton has a beta of 0.83, suggesting that its stock price is 17% less volatile than the S&P 500.

Insider & Institutional Ownership

96.1% of Helmerich & Payne shares are owned by institutional investors. Comparatively, 85.2% of Halliburton shares are owned by institutional investors. 4.4% of Helmerich & Payne shares are owned by company insiders. Comparatively, 0.6% of Halliburton shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Helmerich & Payne and Halliburton, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Helmerich & Payne	1	5	5	1	2.50
Halliburton	1	6	18	0	2.68

Helmerich & Payne presently has a consensus target price of $44.18, suggesting a potential upside of 10.69%. Halliburton has a consensus target price of $43.24, suggesting a potential upside of 32.99%. Given Halliburton’s stronger consensus rating and higher possible upside, analysts clearly believe Halliburton is more favorable than Helmerich & Payne.

Dividends

Helmerich & Payne pays an annual dividend of $1.00 per share and has a dividend yield of 2.5%. Halliburton pays an annual dividend of $0.68 per share and has a dividend yield of 2.1%. Helmerich & Payne pays out -70.9% of its earnings in the form of a dividend. Halliburton pays out 35.6% 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. Halliburton has raised its dividend for 4 consecutive years. Helmerich & Payne is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation and Earnings

This table compares Helmerich & Payne and Halliburton”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Helmerich & Payne	$3.75 billion	1.06	-$163.70 million	($1.41)	-28.31
Halliburton	$22.18 billion	1.22	$1.28 billion	$1.91	17.02

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

Summary

Halliburton beats Helmerich & Payne on 13 of the 18 factors compared between the two stocks.

About Helmerich & Payne

Founded in 1920, Helmerich & Payne, Inc. (H&P) (NYSE: HP) is committed to delivering industry leading levels of drilling productivity and reliability. H&P operates with the highest level of integrity, safety and innovation to deliver superior results for its customers and returns for shareholders. Through its subsidiaries, the Company designs, fabricates and operates high-performance drilling rigs in conventional and unconventional plays around the world. H&P also develops and implements advanced automation, directional drilling and survey management technologies. H&P’s fleet includes 299 land rigs in the U.S., 31 international land rigs and eight offshore platform rigs.

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.