Flotek Industries (NYSE: FTK) and Emerge Energy Services (NYSE:EMES) are both small-cap oils/energy companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, valuation, analyst recommendations, dividends, institutional ownership, profitability and earnings.

Analyst Ratings

This is a breakdown of current recommendations for Flotek Industries and Emerge Energy Services, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Flotek Industries 0 0 1 0 3.00
Emerge Energy Services 0 4 4 0 2.50

Emerge Energy Services has a consensus target price of $17.00, suggesting a potential upside of 127.58%. Given Emerge Energy Services’ higher possible upside, analysts clearly believe Emerge Energy Services is more favorable than Flotek Industries.

Volatility & Risk

Flotek Industries has a beta of 1.75, indicating that its share price is 75% more volatile than the S&P 500. Comparatively, Emerge Energy Services has a beta of 1.61, indicating that its share price is 61% more volatile than the S&P 500.

Institutional and Insider Ownership

97.4% of Flotek Industries shares are owned by institutional investors. Comparatively, 30.9% of Emerge Energy Services shares are owned by institutional investors. 5.5% of Flotek Industries shares are owned by company 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.

Profitability

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

Net Margins Return on Equity Return on Assets
Flotek Industries -10.49% -2.07% -1.57%
Emerge Energy Services -14.29% -170.44% -25.17%

Earnings and Valuation

This table compares Flotek Industries and Emerge Energy Services’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Flotek Industries $300.07 million 0.93 $2.51 million ($0.56) -8.66
Emerge Energy Services $231.85 million 0.97 -$26.10 million ($1.14) -6.55

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

Summary

Flotek Industries beats Emerge Energy Services on 10 of the 13 factors compared between the two stocks.

About Flotek Industries

Flotek Industries, Inc. is a technology-driven company. The Company develops and supplies chemistry and services to the oil and gas industries, and compounds to companies that make cleaning products, cosmetics, food and beverages, and other products that are sold in consumer and industrial markets. The Company operates through two segments: Energy Chemistry Technologies (ECT), and Consumer and Industrial Chemistry Technologies (CICT). The ECT segment designs, develops, manufactures, packages and markets chemistries for use in oil and gas well drilling, cementing, completion and stimulation activities. Its ECT segment’s services include Reservoir Characterization, Polymer Conformance and Logistics Management. The CICT segment sources citrus oil domestically and internationally, and processor of citrus oils in the world. The CICT segment designs, develops and manufactures products that are sold to companies in the flavor and fragrance industries and specialty chemical industry.

About Emerge Energy Services

Emerge Energy Services LP owns, operates, acquires and develops a portfolio of energy service assets. The Company operates through Sand segment. The Company conducts its Sand operations through its subsidiary, Superior Silica Sands LLC (SSS). The Company’s Sand business mines, processes and distributes silica sand, an input for the hydraulic fracturing of oil and gas wells. As of December 31, 2016, its Wisconsin facilities consisted of three dry plants located in Arland, Barron and New Auburn, Wisconsin, with a total permitted capacity of 6.3 million finished tons per year, and five wet plants and mine complexes. As of December 31, 2016, its dry plant in Kosse, Texas, had a capacity of 600,000 tons per year that is supplied by a separate mine and wet plant that processes local Texas sand. As of December 31, 2016, the Company also had 14 transload facilities located throughout North America in the basins where it delivers its sand, as well as a fleet of 5,573 railcars.

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