Exterran (NYSE: EXTN) and Ferrellgas Partners (NYSE:FGP) are both small-cap oils/energy companies, but which is the better investment? We will compare the two companies based on the strength of their dividends, institutional ownership, valuation, risk, analyst recommendations, earnings and profitability.

Insider & Institutional Ownership

88.7% of Exterran shares are held by institutional investors. Comparatively, 6.4% of Ferrellgas Partners shares are held by institutional investors. 2.2% of Exterran shares are held by company insiders. Comparatively, 0.5% of Ferrellgas Partners shares are held by company 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.

Analyst Ratings

This is a summary of recent ratings for Exterran and Ferrellgas Partners, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Exterran 0 2 0 0 2.00
Ferrellgas Partners 1 3 1 0 2.00

Exterran presently has a consensus price target of $28.00, indicating a potential downside of 9.09%. Ferrellgas Partners has a consensus price target of $9.59, indicating a potential upside of 109.33%. Given Ferrellgas Partners’ higher probable upside, analysts plainly believe Ferrellgas Partners is more favorable than Exterran.

Profitability

This table compares Exterran and Ferrellgas Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Exterran 0.04% -2.82% -1.11%
Ferrellgas Partners -2.83% N/A -3.26%

Volatility & Risk

Exterran has a beta of 1.24, indicating that its share price is 24% more volatile than the S&P 500. Comparatively, Ferrellgas Partners has a beta of 0.59, indicating that its share price is 41% less volatile than the S&P 500.

Valuation & Earnings

This table compares Exterran and Ferrellgas Partners’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Exterran $1.03 billion 1.07 -$227.93 million ($0.02) -1,540.00
Ferrellgas Partners $1.93 billion 0.23 -$54.20 million ($0.55) -8.33

Ferrellgas Partners has higher revenue and earnings than Exterran. Exterran is trading at a lower price-to-earnings ratio than Ferrellgas Partners, indicating that it is currently the more affordable of the two stocks.

Dividends

Ferrellgas Partners pays an annual dividend of $0.40 per share and has a dividend yield of 8.7%. Exterran does not pay a dividend. Ferrellgas Partners pays out -72.7% of its earnings in the form of a dividend.

Exterran Company Profile

Exterran Corporation provides compression, production and processing products and services that support the production and transportation of oil and natural gas around the world. The Company operates through three segments: contract operations, aftermarket services, and oil and gas product sales. The contract operations segment provides natural gas compression services, production and processing equipment services, and maintenance services to meet specific customer requirements on assets owned by it. The aftermarket services segment provides a range of services to support the surface production, compression and processing needs of customers, from parts sales and normal maintenance services to full operation of a customer’s owned assets. The oil and gas product sales segment provides design, engineering, manufacturing, installation and sale of natural gas compression units, and accessories and equipment used in the production, treating and processing of crude oil and natural gas.

Ferrellgas Partners Company Profile

Ferrellgas Partners, L.P. is engaged in the retail distribution of propane and related equipment sales, and midstream operations, which include crude oil logistics. The Company’s segments include propane and related equipment sales, midstream operations-crude oil logistics, and corporate and other. The propane and related equipment sales segment consists of the distribution of propane and related equipment and supplies. The midstream operations-crude oil logistics segment is engaged in providing crude oil transportation and logistics services. The corporate and other segment includes midstream operations-water solutions. The Company’s two subsidiaries include Ferrellgas Partners Finance Corp. and the operating partnership. Its general partner performs all management functions for the Company and holds general partner interest in Ferrellgas Partners and the operating partnership. It is a distributor of propane and related equipment and supplies to customers in the United States.

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