Financial Analysis: North American Construction Group (NYSE:NOA) vs. NOV (NYSE:NOV)

NOV (NYSE:NOV) and North American Construction Group (NYSE:NOA) are both energy companies, but which is the better business? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, dividends, valuation, institutional ownership, profitability and risk.

Dividends

NOV pays an annual dividend of $0.30 per share and has a dividend yield of 2.4%. North American Construction Group pays an annual dividend of $0.35 per share and has a dividend yield of 2.4%. NOV pays out 24.6% of its earnings in the form of a dividend. North American Construction Group pays out 40.2% 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. NOV has increased its dividend for 1 consecutive years and North American Construction Group has increased its dividend for 3 consecutive years. North American Construction Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings & Valuation

This table compares NOV and North American Construction Group”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NOV	$8.79 billion	0.54	$635.00 million	$1.22	10.39
North American Construction Group	$850.88 million	0.50	$32.17 million	$0.87	16.53

NOV has higher revenue and earnings than North American Construction Group. NOV is trading at a lower price-to-earnings ratio than North American Construction Group, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current ratings for NOV and North American Construction Group, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NOV	3	9	6	0	2.17
North American Construction Group	0	7	0	0	2.00

NOV currently has a consensus price target of $15.79, indicating a potential upside of 24.54%. Given NOV’s stronger consensus rating and higher probable upside, equities research analysts plainly believe NOV is more favorable than North American Construction Group.

Risk & Volatility

NOV has a beta of 1.26, suggesting that its stock price is 26% more volatile than the S&P 500. Comparatively, North American Construction Group has a beta of 1.21, suggesting that its stock price is 21% more volatile than the S&P 500.

Profitability

This table compares NOV and North American Construction Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
NOV	5.36%	7.25%	4.15%
North American Construction Group	2.82%	17.15%	4.16%

Institutional & Insider Ownership

93.3% of NOV shares are owned by institutional investors. Comparatively, 75.0% of North American Construction Group shares are owned by institutional investors. 2.1% of NOV shares are owned by company insiders. Comparatively, 9.7% of North American Construction Group shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

NOV beats North American Construction Group on 11 of the 17 factors compared between the two stocks.

About NOV

NOV Inc. designs, constructs, manufactures, and sells systems, components, and products for oil and gas drilling and production, and industrial and renewable energy sectors in the United States and internationally. It operates through two segments, Energy Equipment, and Energy Products and Services. The company provides solids control and waste management equipment and services, managed pressure drilling, drilling fluids, premium drillpipe, wired pipe, drilling optimization services, tubular inspection and coating services, instrumentation, downhole tools, and drill bits. It also offers equipment and technologies for hydraulic fracture stimulation, including downhole multistage fracturing tools, pressure pumping trucks, blenders, sanders, hydration and injection units, flowline, and manifolds; coiled tubing units, and wireline units and tools; connections and liner hangers; onshore production consists of composite pipe, surface transfer and progressive cavity pumps, and artificial lift systems; and offshore production, such as floating production systems and subsea production technologies, as well as manufactures industrial pumps and mixers. In addition, the company provides substructures, derricks, and masts; cranes; jacking systems; pipe lifting, racking, rotating, and assembly systems; mud pumps; pressure control equipment; drives and generators; rig instrumentation and control systems; mooring, anchor, and deck handling machinery; equipment components for offshore wind construction vessels; and pipelay and construction systems. Further, the company offers spare parts, repair, and rentals as well as comprehensive remote equipment monitoring, technical support, field service, and customer training. The company was formerly known as National Oilwell Varco, Inc. and changed its name to NOV Inc. in January 2021. NOV Inc. was founded in 1862 and is based in Houston, Texas.

About North American Construction Group

North American Construction Group Ltd. provides mining and heavy civil construction services to customers in the resource development and industrial construction sectors in Australia, Canada, and the United States. The company operates Heavy Equipment – Canada, Heavy Equipment – Australia, and Other segments. It also offers mine management services for thermal coal mines; and construction and operations support services in the Canadian oil sands region. In addition, the company provides fully maintained heavy equipment rentals and full service mine operations support at metallurgical and thermal coal mines; heavy equipment rentals to iron ore, gold and lithium producers; and heavy equipment maintenance, component remanufacturing, and full equipment rebuild services to mining companies and other heavy equipment operators, as well as supplies production-critical components to the mining and construction industry. As of December 31, 2023, it operated a heavy equipment fleet of 900 units. The company was formerly known as North American Energy Partners Inc. and changed its name to North American Construction Group Ltd. in April 2018. North American Construction Group Ltd. was incorporated in 1953 and is headquartered in Acheson, Canada.