Critical Survey: Halliburton (NYSE:HAL) and Solaris Energy Infrastructure (NYSE:SEI)

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

Dividends

Solaris Energy Infrastructure pays an annual dividend of $0.48 per share and has a dividend yield of 0.8%. Halliburton pays an annual dividend of $0.68 per share and has a dividend yield of 2.0%. Solaris Energy Infrastructure pays out 50.0% of its earnings in the form of a dividend. Halliburton pays out 28.5% 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. Halliburton has increased its dividend for 4 consecutive years. Halliburton is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings and Valuation

This table compares Solaris Energy Infrastructure and Halliburton”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Solaris Energy Infrastructure	$622.21 million	7.73	$30.17 million	$0.96	65.40
Halliburton	$22.18 billion	1.25	$1.28 billion	$2.39	13.99

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

Profitability

This table compares Solaris Energy Infrastructure and Halliburton’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Solaris Energy Infrastructure	7.99%	12.82%	4.20%
Halliburton	8.90%	18.36%	7.84%

Volatility & Risk

Solaris Energy Infrastructure has a beta of 1.4, suggesting that its share price is 40% more volatile than the S&P 500. Comparatively, Halliburton has a beta of 0.76, suggesting that its share price is 24% less volatile than the S&P 500.

Insider & Institutional Ownership

67.4% of Solaris Energy Infrastructure shares are held by institutional investors. Comparatively, 85.2% of Halliburton shares are held by institutional investors. 20.2% of Solaris Energy Infrastructure shares are held by insiders. Comparatively, 0.6% of Halliburton shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Solaris Energy Infrastructure and Halliburton, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Solaris Energy Infrastructure	0	1	9	2	3.08
Halliburton	1	5	18	0	2.71

Solaris Energy Infrastructure presently has a consensus price target of $100.38, indicating a potential upside of 59.89%. Halliburton has a consensus price target of $43.86, indicating a potential upside of 31.17%. Given Solaris Energy Infrastructure’s stronger consensus rating and higher possible upside, analysts clearly believe Solaris Energy Infrastructure is more favorable than Halliburton.

Summary

Halliburton beats Solaris Energy Infrastructure on 11 of the 18 factors compared between the two stocks.

About Solaris Energy Infrastructure

Solaris Energy Infrastructure, Inc. provides equipment and services for energy production and power generation. Its offerings include natural gas-fueled power systems and related equipment, as well as mobile systems used to store, transport and deliver proppant at oil and gas wells. The company was established as Solaris Oilfield Infrastructure and later adopted its current name as its business expanded beyond oilfield logistics. Its oilfield services primarily support operators in U.S. shale basins, while its power solutions serve customers seeking scalable power generation.

About Halliburton

Halliburton Company (NYSE: HAL) is a global provider of products and services for the energy industry. The company supports the exploration, development, and production of oil and natural gas through technologies and services used throughout the life cycle of a well. Halliburton operates through two primary business segments: Completion and Production, and Drilling and Evaluation. Its offerings include cementing, stimulation, well completion, production enhancement, drilling services, drilling fluids, well testing, wireline and perforating services, formation evaluation, and project management.