Head to Head Review: Archrock (AROC) & Superior Energy Services (NYSE:SPN)

Superior Energy Services (NYSE: SPN) and Archrock (NYSE:AROC) are both small-cap energy companies, but which is the superior stock? We will compare the two companies based on the strength of their valuation, analyst recommendations, earnings, risk, dividends, profitability and institutional ownership.

Profitability

This table compares Superior Energy Services and Archrock’s 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%
Archrock -8.62% -2.93% -0.83%

Analyst Recommendations

This is a summary of current recommendations and price targets for Superior Energy Services and Archrock, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Superior Energy Services 0 15 7 0 2.32
Archrock 0 6 1 0 2.14

Superior Energy Services presently has a consensus price target of $12.88, indicating a potential upside of 15.33%. Archrock has a consensus price target of $13.13, indicating a potential upside of 25.00%. Given Archrock’s higher probable upside, analysts plainly believe Archrock is more favorable than Superior Energy Services.

Risk and Volatility

Superior Energy Services has a beta of 2.16, meaning that its stock price is 116% more volatile than the S&P 500. Comparatively, Archrock has a beta of 3.34, meaning that its stock price is 234% more volatile than the S&P 500.

Dividends

Archrock pays an annual dividend of $0.48 per share and has a dividend yield of 4.6%. Superior Energy Services does not pay a dividend. Archrock pays out -49.5% of its earnings in the form of a dividend.

Insider and Institutional Ownership

83.4% of Archrock shares are owned by institutional investors. 3.5% of Superior Energy Services shares are owned by insiders. Comparatively, 2.5% of Archrock shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Superior Energy Services and Archrock’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Superior Energy Services $1.45 billion 1.18 -$886.89 million ($2.46) -4.54
Archrock $807.07 million 1.00 -$54.55 million ($0.97) -10.82

Archrock has lower revenue, but higher earnings 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.

Summary

Archrock beats Superior Energy Services on 10 of the 16 factors compared between the two stocks.

Superior Energy Services Company Profile

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.

Archrock Company Profile

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.

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