Analyzing Fairmount Santrol (FMSA) and Emerge Energy Services (EMES)

Fairmount Santrol (NYSE: FMSA) and Emerge Energy Services (NYSE:EMES) are both small-cap industrial products companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, earnings, analyst recommendations, risk, dividends, institutional ownership and profitability.

Volatility and Risk

Fairmount Santrol has a beta of 2.13, indicating that its stock price is 113% more volatile than the S&P 500. Comparatively, Emerge Energy Services has a beta of 1.88, indicating that its stock price is 88% more volatile than the S&P 500.

Valuation & Earnings

This table compares Fairmount Santrol and Emerge Energy Services’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Fairmount Santrol $959.79 million 1.43 $53.78 million $0.24 25.46
Emerge Energy Services $364.30 million 0.71 -$6.83 million ($0.12) -69.33

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

Analyst Ratings

This is a summary of current ratings and price targets for Fairmount Santrol and Emerge Energy Services, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Fairmount Santrol 1 10 10 0 2.43
Emerge Energy Services 0 6 2 0 2.25

Fairmount Santrol currently has a consensus price target of $6.01, suggesting a potential downside of 1.70%. Emerge Energy Services has a consensus price target of $9.86, suggesting a potential upside of 18.48%. Given Emerge Energy Services’ higher probable upside, analysts plainly believe Emerge Energy Services is more favorable than Fairmount Santrol.

Institutional and Insider Ownership

71.5% of Fairmount Santrol shares are held by institutional investors. Comparatively, 10.2% of Emerge Energy Services shares are held by institutional investors. 9.8% of Fairmount Santrol shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Fairmount Santrol and Emerge Energy Services’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Fairmount Santrol 8.89% 33.29% 7.96%
Emerge Energy Services 1.53% 19.61% 3.03%

Summary

Fairmount Santrol beats Emerge Energy Services on 13 of the 14 factors compared between the two stocks.

Fairmount Santrol Company Profile

Fairmount Santrol Holdings Inc., together with its subsidiaries, provides sand-based proppant solutions for exploration and production companies. The company operates in two segments, Proppant Solutions and Industrial & Recreational Products. The Proppant Solutions segment primarily provides sand-based proppants for use in hydraulic fracturing operations in the United States, Canada, Argentina, Mexico, China, and northern Europe. Its products include northern white frac sand, API-spec brown sand, and coated sand products; and Propel SSP product that utilizes a polymer coating applied to a proppant substrate. The Industrial & Recreational Products segment offers raw, coated, and custom blended sands for use in building products, foundry, glass, turf and landscape, and filtration industries primarily in North America. Fairmount Santrol Holdings Inc. also supplies proppants to oilfield service companies. The company was formerly known as FMSA Holdings Inc. and changed its name to Fairmount Santrol Holdings Inc. in July 2015. Fairmount Santrol Holdings Inc. was incorporated in 1986 and is headquartered in Chesterland, Ohio.

Emerge Energy Services Company Profile

Emerge Energy Services LP, through its subsidiary, Superior Silica Sands LLC, operates an energy services company in the United States. It engages in mining, producing, and distributing silica sand, which is a primary input for the hydraulic fracturing of oil and natural gas wells. The company serves oilfield services companies, and exploration and production companies that are engaged in hydraulic fracturing. Emerge Energy Services GP, LLC operates as the general partner of the company. Emerge Energy Services LP was founded in 2012 and is headquartered in Fort Worth, Texas.

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