Epsilon Energy (NASDAQ:EPSN) vs. Cactus (NYSE:WHD) Head to Head Analysis

Cactus (NYSE:WHD) and Epsilon Energy (NASDAQ:EPSN) are both energy companies, but which is the better stock? We will compare the two businesses based on the strength of their profitability, earnings, analyst recommendations, valuation, risk, dividends and institutional ownership.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Cactus and Epsilon Energy, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cactus	0	4	2	0	2.33
Epsilon Energy	0	1	0	0	2.00

Cactus presently has a consensus price target of $47.75, suggesting a potential upside of 14.74%. Epsilon Energy has a consensus price target of $8.40, suggesting a potential upside of 73.20%. Given Epsilon Energy’s higher possible upside, analysts clearly believe Epsilon Energy is more favorable than Cactus.

Profitability

This table compares Cactus and Epsilon Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Cactus	15.86%	16.02%	11.82%
Epsilon Energy	11.75%	6.71%	5.39%

Insider and Institutional Ownership

85.1% of Cactus shares are owned by institutional investors. Comparatively, 60.3% of Epsilon Energy shares are owned by institutional investors. 16.8% of Cactus shares are owned by company insiders. Comparatively, 7.1% of Epsilon Energy shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Dividends

Cactus pays an annual dividend of $0.56 per share and has a dividend yield of 1.3%. Epsilon Energy pays an annual dividend of $0.25 per share and has a dividend yield of 5.2%. Cactus pays out 22.3% of its earnings in the form of a dividend. Epsilon Energy pays out 92.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Cactus has raised its dividend for 4 consecutive years.

Valuation and Earnings

This table compares Cactus and Epsilon Energy”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cactus	$1.13 billion	2.94	$185.41 million	$2.51	16.58
Epsilon Energy	$45.71 million	2.34	$1.93 million	$0.27	17.96

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

Volatility and Risk

Cactus has a beta of 1.46, suggesting that its share price is 46% more volatile than the S&P 500. Comparatively, Epsilon Energy has a beta of 0.04, suggesting that its share price is 96% less volatile than the S&P 500.

Summary

Cactus beats Epsilon Energy on 14 of the 17 factors compared between the two stocks.

About Cactus

Cactus, Inc., together with its subsidiaries, designs, manufactures, sells, and leases pressure control and spoolable pipes in the United States, Australia, Canada, the Middle East, and internationally. It operates through two segments, Pressure Control and Spoolable Technologies. The Pressure Control segment designs, manufactures, sells, and rents a range of wellhead and pressure control equipment under the Cactus Wellhead brand name through service centers. Its products are sold and rented primarily for onshore unconventional oil and gas wells for drilling, completion, and production phases of the wells. This segment also provides field services to install, maintain, and handle the equipment. The Spoolable Technologies segment designs, manufactures, and sells spoolable pipes and associated end fittings under the FlexSteel brand name. Its products are primarily used to transport oil, gas, and other liquids. This segment also provides field services and rental items through service centers and pipe yards, as well as offers equipment and services internationally. In addition, the company offers repair and refurbishment services. Cactus, Inc. was founded in 2011 and is headquartered in Houston, Texas.

About Epsilon Energy

Epsilon Energy Ltd., a North American onshore independent natural gas and oil company, engages in the acquisition, development, gathering, and production of natural oil and gas reserves in the United States. The company operates through Upstream and Gathering System segments. It has natural gas production in the Marcellus Shale in Pennsylvania; and oil, natural gas liquids, and natural gas production in the Permian Basin in Texas and New Mexico, and Anadarko Basin in Oklahoma. Epsilon Energy Ltd. was incorporated in 2005 and is based in Calgary, Canada.