Natural Gas Services Group (NYSE:NGS – Get Free Report) and NXT Energy Solutions (OTCMKTS:NSFDF – Get Free Report) are both small-cap energy companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, valuation, profitability, analyst recommendations, dividends, earnings and institutional ownership.
Volatility & Risk
Natural Gas Services Group has a beta of 0.42, meaning that its stock price is 58% less volatile than the S&P 500. Comparatively, NXT Energy Solutions has a beta of 1.32, meaning that its stock price is 32% more volatile than the S&P 500.
Profitability
This table compares Natural Gas Services Group and NXT Energy Solutions’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Natural Gas Services Group | 10.81% | 8.10% | 3.70% |
| NXT Energy Solutions | -312.44% | -62.75% | -46.28% |
Valuation & Earnings
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Natural Gas Services Group | $172.32 million | 2.83 | $19.93 million | $1.61 | 23.44 |
| NXT Energy Solutions | $11.70 million | 2.73 | -$1.66 million | ($0.05) | -5.34 |
Natural Gas Services Group has higher revenue and earnings than NXT Energy Solutions. NXT Energy Solutions is trading at a lower price-to-earnings ratio than Natural Gas Services Group, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
65.6% of Natural Gas Services Group shares are owned by institutional investors. Comparatively, 26.2% of NXT Energy Solutions shares are owned by institutional investors. 3.1% of Natural Gas Services Group shares are owned by insiders. Comparatively, 34.1% of NXT Energy Solutions shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
Analyst Recommendations
This is a summary of current ratings and price targets for Natural Gas Services Group and NXT Energy Solutions, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Natural Gas Services Group | 0 | 1 | 3 | 0 | 2.75 |
| NXT Energy Solutions | 0 | 0 | 0 | 0 | 0.00 |
Natural Gas Services Group presently has a consensus price target of $50.50, indicating a potential upside of 33.81%. Given Natural Gas Services Group’s stronger consensus rating and higher probable upside, research analysts clearly believe Natural Gas Services Group is more favorable than NXT Energy Solutions.
Summary
Natural Gas Services Group beats NXT Energy Solutions on 12 of the 14 factors compared between the two stocks.
About Natural Gas Services Group
Natural Gas Services Group, Inc. provides natural gas compression equipment and services to the energy industry in the United States. It engineers and fabricates, operates, rents, and maintains natural gas compressors for oil and natural gas production and plant facilities. It also designs, fabricates, and assembles compressor units for rental or sale; and designs, manufactures, and sells a line of reciprocating natural gas compressor frames, cylinders, and parts. In addition, the company offers flare stacks and related ignition and control devices for the onshore and offshore incineration of gas compounds, such as hydrogen sulfide, carbon dioxide, natural gas, and liquefied petroleum gases. Further, it provides aftermarket services for its compressor and flare sales business; and exchange and rebuild program for small horsepower screw compressors. It markets its products to exploration and production companies that utilize compressor units for artificial lift applications; and oil and natural gas exploration and production companies. Natural Gas Services Group, Inc. was incorporated in 1998 and is headquartered in Midland, Texas.
About NXT Energy Solutions
NXT Energy Solutions Inc., a technology company, provides services to the oil and gas industry through its proprietary stress field detection (SFD) technology worldwide. Its SFD technology, a remote sensing airborne survey system utilizes quantum-scale sensors to detect gravity field perturbations in an airborne survey method which can be used onshore and offshore to remotely identify traps and reservoirs with hydrocarbon and geothermal exploration potential. The company was formerly known as Energy Exploration Technologies Inc. and changed its name to NXT Energy Solutions Inc. in September 2008. NXT Energy Solutions Inc. was incorporated in 1994 and is headquartered in Calgary, Canada.
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