Berry (NASDAQ:BRY – Get Free Report) and Cactus (NYSE:WHD – Get Free Report) are both energy companies, but which is the superior business? We will contrast the two businesses based on the strength of their dividends, institutional ownership, risk, earnings, profitability, analyst recommendations and valuation.
Profitability
This table compares Berry and Cactus’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Berry | -4.51% | 7.36% | 3.41% |
| Cactus | 16.78% | 18.99% | 13.76% |
Analyst Recommendations
This is a breakdown of recent ratings and target prices for Berry and Cactus, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Berry | 0 | 1 | 1 | 0 | 2.50 |
| Cactus | 1 | 3 | 2 | 0 | 2.17 |
Institutional and Insider Ownership
94.9% of Berry shares are owned by institutional investors. Comparatively, 85.1% of Cactus shares are owned by institutional investors. 2.0% of Berry shares are owned by company insiders. Comparatively, 13.8% of Cactus shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Valuation & Earnings
This table compares Berry 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 | |
| Berry | $776.50 million | 0.30 | $19.25 million | ($0.47) | -6.43 |
| Cactus | $1.14 billion | 3.18 | $185.41 million | $2.81 | 16.11 |
Cactus has higher revenue and earnings than Berry. Berry is trading at a lower price-to-earnings ratio than Cactus, indicating that it is currently the more affordable of the two stocks.
Dividends
Berry pays an annual dividend of $0.12 per share and has a dividend yield of 4.0%. Cactus pays an annual dividend of $0.52 per share and has a dividend yield of 1.1%. Berry pays out -25.5% of its earnings in the form of a dividend. Cactus pays out 18.5% 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. Cactus has raised its dividend for 4 consecutive years. Berry is clearly the better dividend stock, given its higher yield and lower payout ratio.
Volatility and Risk
Berry has a beta of 1.09, meaning that its stock price is 9% more volatile than the S&P 500. Comparatively, Cactus has a beta of 1.48, meaning that its stock price is 48% more volatile than the S&P 500.
Summary
Cactus beats Berry on 12 of the 17 factors compared between the two stocks.
About Berry
Berry Petroleum Company, LLC., formerly Berry Petroleum Company, is an independent energy company. The Company is engaged in the production, development, exploitation, and acquisition of oil and natural gas. The Company’s principal reserves and producing properties are located in California (South Midway-Sunset (SMWSS)-Steam Floods, North Midway-Sunset (NMWSS)-Diatomite, NMWSS-New Steam Floods, Texas (Permian and E. Texas), Utah (Uinta) and Colorado (Piceance). The Company’s operations are conducted in the continental United States. In December 2013, Linn Energy LLC and Linn Co, LLC (Linn Co) announced the completion of the merger between LinnCo and Berry Petroleum Company (Berry), where LinnCo had acquired all of Berry’s interest.
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.
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