Head-To-Head Comparison: Cactus (NYSE:WHD) versus Kodiak Gas Services (NYSE:KGS)

Cactus (NYSE:WHD) and Kodiak Gas Services (NYSE:KGS) are both mid-cap energy companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, profitability, earnings, analyst recommendations, valuation, institutional ownership and risk.

Profitability

This table compares Cactus and Kodiak Gas Services’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Cactus	6.01%	16.66%	10.81%
Kodiak Gas Services	5.77%	11.92%	3.70%

Insider and Institutional Ownership

85.1% of Cactus shares are held by institutional investors. Comparatively, 24.9% of Kodiak Gas Services shares are held by institutional investors. 12.9% of Cactus shares are held by insiders. Comparatively, 0.6% of Kodiak Gas Services shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Dividends

Cactus pays an annual dividend of $0.60 per share and has a dividend yield of 0.9%. Kodiak Gas Services pays an annual dividend of $1.96 per share and has a dividend yield of 3.1%. Cactus pays out 51.3% of its earnings in the form of a dividend. Kodiak Gas Services pays out 233.3% 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 increased its dividend for 4 consecutive years and Kodiak Gas Services has increased its dividend for 2 consecutive years.

Valuation and Earnings

This table compares Cactus and Kodiak Gas Services”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cactus	$1.08 billion	5.09	$166.01 million	$1.17	58.56
Kodiak Gas Services	$1.31 billion	4.83	$80.52 million	$0.84	74.46

Cactus has higher earnings, but lower revenue than Kodiak Gas Services. Cactus is trading at a lower price-to-earnings ratio than Kodiak Gas Services, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Cactus and Kodiak Gas Services, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cactus	0	4	3	0	2.43
Kodiak Gas Services	0	2	10	0	2.83

Cactus presently has a consensus price target of $66.80, suggesting a potential downside of 2.51%. Kodiak Gas Services has a consensus price target of $78.89, suggesting a potential upside of 26.13%. Given Kodiak Gas Services’ stronger consensus rating and higher probable upside, analysts plainly believe Kodiak Gas Services is more favorable than Cactus.

Risk & Volatility

Cactus has a beta of 1.37, meaning that its share price is 37% more volatile than the S&P 500. Comparatively, Kodiak Gas Services has a beta of 0.96, meaning that its share price is 4% less volatile than the S&P 500.

Summary

Cactus beats Kodiak Gas Services on 11 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 Kodiak Gas Services

Kodiak Gas Services, Inc. operates contract compression infrastructure for customers in the oil and gas industry in the United States. It operates in two segments, Compression Operations and Other Services. The Compression Operations segment operates company-owned and customer-owned compression infrastructure to enable the production, gathering, and transportation of natural gas and oil. The Other Services segment provides a range of contract services, including station construction, maintenance and overhaul, and other ancillary time and material-based offerings. The company was formerly known as Frontier TopCo, Inc. Kodiak Gas Services, Inc. was founded in 2010 and is headquartered in The Woodlands, Texas.