Archrock Partners (NASDAQ: APLP) and Oceaneering International (NYSE:OII) are both small-cap oils/energy companies, but which is the better stock? We will compare the two companies based on the strength of their earnings, risk, analyst recommendations, profitability, institutional ownership, dividends and valuation.
Volatility & Risk
Archrock Partners has a beta of 2.22, meaning that its share price is 122% more volatile than the S&P 500. Comparatively, Oceaneering International has a beta of 1.63, meaning that its share price is 63% more volatile than the S&P 500.
This table compares Archrock Partners and Oceaneering International’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a breakdown of recent ratings and price targets for Archrock Partners and Oceaneering International, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Archrock Partners presently has a consensus target price of $17.50, indicating a potential upside of 49.83%. Oceaneering International has a consensus target price of $24.84, indicating a potential upside of 24.22%. Given Archrock Partners’ stronger consensus rating and higher probable upside, equities research analysts plainly believe Archrock Partners is more favorable than Oceaneering International.
Valuation and Earnings
This table compares Archrock Partners and Oceaneering International’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Archrock Partners||$562.36 million||1.46||-$10.75 million||($0.27)||-43.26|
|Oceaneering International||$2.27 billion||0.87||$24.58 million||($0.19)||-105.26|
Oceaneering International has higher revenue and earnings than Archrock Partners. Oceaneering International is trading at a lower price-to-earnings ratio than Archrock Partners, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
46.8% of Archrock Partners shares are owned by institutional investors. Comparatively, 99.7% of Oceaneering International shares are owned by institutional investors. 0.4% of Archrock Partners shares are owned by insiders. Comparatively, 0.9% of Oceaneering International shares are owned 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.
Archrock Partners pays an annual dividend of $1.14 per share and has a dividend yield of 9.8%. Oceaneering International pays an annual dividend of $0.60 per share and has a dividend yield of 3.0%. Archrock Partners pays out -422.2% of its earnings in the form of a dividend. Oceaneering International pays out -315.8% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Archrock Partners is clearly the better dividend stock, given its higher yield and lower payout ratio.
Archrock Partners Company Profile
Archrock Partners, L.P. is engaged in natural gas compression industry in the United States. The Company’s contract operations services include designing, sourcing, owning, installing, operating, servicing, repairing and maintaining equipment to provide natural gas compression services to its customers. It provides contract operations services, including the personnel, equipment, tools, materials and supplies to meet its customers’ natural gas compression needs. Archrock General Partner, L.P., its general partner, is a subsidiary of Archrock and has responsibility for conducting its business and for managing its operations. The Company utilizes both slow and high speed reciprocating compressors primarily driven by internal natural gas fired combustion engines. Its customers include companies engaged in various aspects of the oil and natural gas industry, including natural gas producers, processors, gatherers, transporters and storage providers.
Oceaneering International Company Profile
Oceaneering International, Inc. is an oilfield provider of engineered services and products, primarily to the offshore oil and gas industry, with a focus on deepwater applications. The Company’s business segments are contained within two businesses: services and products provided to the oil and gas industry (Oilfield) and all other services and products (Advanced Technologies). Its four business segments within the Oilfield business are Remotely Operated Vehicles (ROVs), Subsea Products, Subsea Projects and Asset Integrity. The services and products it provides to the oil and gas industry include remotely operated vehicles, specialty subsea hardware, engineering and project management, subsea intervention services, including manned diving, survey and positioning services and asset integrity and nondestructive testing services. The Company serves the defense, aerospace and commercial theme park industries.
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