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Comparing FMC Technologies and Technip’s Leverage

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FMC Technologies’ net debt

In this part, we’ll discuss how much net debt FMC Technologies (FTI) and Technip accumulated since the beginning of 2016 through September 30. Net debt is aggregate short and long-term debt less cash and marketable securities. We’ll also compare the leverage between the two companies.

On September 30, FMC Technologies’ net debt fell 21% to $190 million—compared to December 31, 2015. Although its total debt increased during the same period, its cash and cash equivalents increased more. It led to lower net debt. From December 31 to September 30, FMC Technologies’ total debt-to-equity ratio remained nearly unchanged at 0.47x. FMC Technologies accounts for 0.5% of the iShares US Energy ETF (IYE).

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Technip’s net debt

On September 30, Technip’s net debt was -1.8 billion euros. It cash and marketable securities exceeded its total debt. In comparison, National Oilwell Varco’s (NOV) net debt fell 8% on September 30, 2016—compared to December 31, 2015.

From December 31, 2015, to September 30, 2016, Technip’s total debt fell 9%. Total debt-to-shareholders’ equity fell to 0.48x on September 30 from 0.56x at the beginning of the year. Technip’s shareholder equity increased during this period due to higher net income and capital infusion. Lower leverage reflects decreased risk levels.

Next, we’ll discuss Wall Street analysts’ recommendations for FMC Technologies.

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