Liberty Energy (NYSE:LBRT) versus Archrock (NYSE:AROC) Head to Head Comparison

Archrock (NYSE:AROC) and Liberty Energy (NYSE:LBRT) are both mid-cap energy companies, but which is the better business? We will compare the two companies based on the strength of their valuation, institutional ownership, earnings, profitability, risk, analyst recommendations and dividends.

Volatility and Risk

Archrock has a beta of 1.11, suggesting that its stock price is 11% more volatile than the S&P 500. Comparatively, Liberty Energy has a beta of 0.72, suggesting that its stock price is 28% less volatile than the S&P 500.

Profitability

This table compares Archrock and Liberty Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Archrock	18.43%	20.40%	6.81%
Liberty Energy	4.76%	1.69%	1.00%

Institutional & Insider Ownership

95.4% of Archrock shares are owned by institutional investors. Comparatively, 98.2% of Liberty Energy shares are owned by institutional investors. 2.6% of Archrock shares are owned by insiders. Comparatively, 1.9% of Liberty Energy shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Archrock and Liberty Energy, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Archrock	0	1	7	1	3.00
Liberty Energy	0	9	3	2	2.50

Archrock presently has a consensus target price of $31.50, indicating a potential upside of 35.62%. Liberty Energy has a consensus target price of $16.30, indicating a potential downside of 0.65%. Given Archrock’s stronger consensus rating and higher possible upside, research analysts clearly believe Archrock is more favorable than Liberty Energy.

Earnings & Valuation

This table compares Archrock and Liberty Energy”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Archrock	$1.44 billion	2.83	$172.23 million	$1.50	15.48
Liberty Energy	$3.91 billion	0.68	$316.01 million	$1.12	14.65

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

Dividends

Archrock pays an annual dividend of $0.84 per share and has a dividend yield of 3.6%. Liberty Energy pays an annual dividend of $0.36 per share and has a dividend yield of 2.2%. Archrock pays out 56.0% of its earnings in the form of a dividend. Liberty Energy pays out 32.1% 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. Archrock has increased its dividend for 3 consecutive years and Liberty Energy has increased its dividend for 2 consecutive years. Archrock is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Archrock beats Liberty Energy on 13 of the 18 factors compared between the two stocks.

About Archrock

Archrock, Inc., together with its subsidiaries, operates as an energy infrastructure company in the United States. The company operates in two segments, Contract Operations and Aftermarket Services. It engages in the designing, sourcing, owning, installing, operating, servicing, repairing, and maintaining of its owned fleet of natural gas compression equipment to provide natural gas compression services. The company also sells over-the-counter parts and components; and provides operations, major and routine maintenance, overhaul, and reconfiguration services to customers who own compression equipment. It serves integrated and independent oil and natural gas processors, gatherers, and transporters. The company was formerly known as Exterran Holdings, Inc. and changed its name to Archrock, Inc. in November 2015. Archrock, Inc. was founded in 1990 and is headquartered in Houston, Texas.

About Liberty Energy

Liberty Energy Inc. provides hydraulic services and related technologies to onshore oil and natural gas exploration, and production companies in North America. The company offers hydraulic fracturing services, including complementary services, such as wireline services, proppant delivery solutions, field gas processing and treating, compressed natural gas (CNG) delivery, data analytics, related goods comprising sand mine operations, and technologies; and well site fueling and logistics. As of as of December 31, 2023, the company owned and operated a fleet of approximately 40 active hydraulic fracturing; and two sand mines in the Permian Basin. In addition, the company provides services primarily in the Permian Basin, the Williston Basin, the Eagle Ford Shale, the Haynesville Shale, the Appalachian Basin (Marcellus Shale and Utica Shale), the Western Canadian Sedimentary Basin, the Denver-Julesburg Basin (the DJ Basin), and the Anadarko Basin. Liberty Energy Inc. was formerly known as Liberty Oilfield Services Inc. and changed its name to Liberty Energy Inc. in April 2022. The company was founded in 2011 and is headquartered in Denver, Colorado.