Archrock (NYSE: AROC) and Superior Energy Services (NYSE:SPN) are both small-cap energy companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, earnings, profitability, analyst recommendations, institutional ownership, valuation and dividends.
Institutional & Insider Ownership
83.4% of Archrock shares are held by institutional investors. 2.5% of Archrock shares are held by insiders. Comparatively, 3.5% of Superior Energy Services shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.
This table compares Archrock and Superior Energy Services’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Superior Energy Services||-24.59%||-26.18%||-9.41%|
This is a summary of recent ratings and price targets for Archrock and Superior Energy Services, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Superior Energy Services||0||12||8||0||2.40|
Archrock presently has a consensus target price of $13.35, suggesting a potential upside of 34.85%. Superior Energy Services has a consensus target price of $12.71, suggesting a potential upside of 12.04%. Given Archrock’s higher possible upside, analysts clearly believe Archrock is more favorable than Superior Energy Services.
Earnings and Valuation
This table compares Archrock and Superior Energy Services’ revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Archrock||$807.07 million||0.94||-$54.55 million||($0.97)||-10.21|
|Superior Energy Services||$1.45 billion||1.20||-$886.89 million||($2.46)||-4.61|
Archrock has higher earnings, but lower revenue than Superior Energy Services. Archrock is trading at a lower price-to-earnings ratio than Superior Energy Services, indicating that it is currently the more affordable of the two stocks.
Archrock pays an annual dividend of $0.48 per share and has a dividend yield of 4.8%. Superior Energy Services does not pay a dividend. Archrock pays out -49.5% of its earnings in the form of a dividend.
Risk and Volatility
Archrock has a beta of 3.34, meaning that its stock price is 234% more volatile than the S&P 500. Comparatively, Superior Energy Services has a beta of 2.16, meaning that its stock price is 116% more volatile than the S&P 500.
Archrock beats Superior Energy Services on 10 of the 16 factors compared between the two stocks.
Archrock, Inc. is a natural gas contract operations services company. The Company also provides natural gas compression services to customers in the oil and natural gas industry throughout the United States and supplies aftermarket services to customers that own compression equipment in the United States. The Company operates through two segments: contract operations and aftermarket services. The contract operations segment primarily provides natural gas compression services to meet specific customer requirements. The Company provides contract operations services, including the personnel, equipment, tools, materials and supplies to meet its customers’ natural gas compression needs. The aftermarket services segment provides a range of services to support the compression needs of customers, from parts sales and normal maintenance services to full operation of a customer’s owned assets.
About Superior Energy Services
Superior Energy Services, Inc. provides a range of services and products to the energy industry related to the exploration, development and production of oil and natural gas. The Company’s segments include Drilling Products and Services, which rents and sells bottom hole assemblies, drill pipe, tubulars and specialized equipment for use with onshore and offshore oil and gas well drilling, production and workover activities; Onshore Completion and Workover Services, which provides pressure pumping services used to complete and stimulate production in new oil and gas wells, fluid handling services and well servicing rigs that provide a range of well completion and maintenance services; Production Services, which provides intervention services, such as coiled tubing, cased hole and mechanical wireline, hydraulic workover and snubbing, and remedial pumping services, and Technical Solutions, which provides services requiring specialized engineering, manufacturing or project planning.
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