Better Buy: Core Laboratories N.V. vs. Oil States International, Inc.
The oil market downturn has been a heavy weight on oilfield service companies. Drilling activities have all but dried up in some spots, which drove down revenue and profitability for service providers. That said, while the industry downturn has had an adverse impact on both Core Labs (NYSE: CLB) and Oil States (NYSE: OIS), Core has managed to remain profitable throughout, which is why its stock hasn't sunk as deeply as Oil States over the past few years. There are a few reasons for this, which in my opinion, makes Core the better buy versus Oil States.
Oil States International is a typical oilfield service company. It focuses on manufacturing products for deepwater production facilities and making certain equipment for onshore drilling in addition to providing well completion and land drilling services. That said, one problem with this focus is that these activities are highly competitive and dominated by industry giants like Halliburton (NYSE: HAL). This competition has driven down industrywide margins, with smaller scale producers like Oil State feeling the brunt of the impact. For example, its well site services segment lost money last year while earnings in its offshore and manufactured products segment fell 36%. Contrast that with Halliburton, for example, which remained profitable in both its completion and production and its drilling and evaluation segments. Though, like Oil States, Halliburton reported a net loss for the full year when factoring in other costs.
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Source: Fool.com