Analyzing Archrock (AROC) and American Midstream Partners (AMID)

Archrock (NYSE:AROC) and American Midstream Partners (NYSE:AMID) are both small-cap oils/energy companies, but which is the better business? We will compare the two companies based on the strength of their earnings, analyst recommendations, profitability, risk, valuation, institutional ownership and dividends.

Earnings and Valuation

This table compares Archrock and American Midstream Partners’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Archrock $794.66 million 1.86 $18.95 million ($0.20) -57.10
American Midstream Partners $655.98 million 0.69 -$222.97 million N/A N/A

Archrock has higher revenue and earnings than American Midstream Partners.

Insider and Institutional Ownership

88.9% of Archrock shares are held by institutional investors. Comparatively, 41.3% of American Midstream Partners shares are held by institutional investors. 2.5% of Archrock shares are held by company insiders. Comparatively, 5.4% of American Midstream Partners shares are held 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.

Volatility and Risk

Archrock has a beta of 2.86, suggesting that its stock price is 186% more volatile than the S&P 500. Comparatively, American Midstream Partners has a beta of 0.99, suggesting that its stock price is 1% less volatile than the S&P 500.

Dividends

Archrock pays an annual dividend of $0.53 per share and has a dividend yield of 4.6%. American Midstream Partners pays an annual dividend of $0.41 per share and has a dividend yield of 6.7%. Archrock pays out -265.0% of its earnings in the form of a dividend.

Analyst Recommendations

This is a summary of current recommendations and price targets for Archrock and American Midstream Partners, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Archrock 0 2 5 0 2.71
American Midstream Partners 0 1 0 0 2.00

Archrock currently has a consensus price target of $14.63, indicating a potential upside of 28.06%. American Midstream Partners has a consensus price target of $11.00, indicating a potential upside of 78.86%. Given American Midstream Partners’ higher probable upside, analysts clearly believe American Midstream Partners is more favorable than Archrock.

Profitability

This table compares Archrock and American Midstream Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Archrock 4.19% 0.45% 0.14%
American Midstream Partners -13.56% -66.74% -7.63%

Summary

Archrock beats American Midstream Partners on 11 of the 14 factors compared between the two stocks.

About Archrock

Archrock, Inc. engages in the natural gas contract operations services business in the United States. The company provides natural gas compression services to customers in the oil and natural gas industry. It also offers aftermarket services, such as parts and components; and operation, maintenance, overhaul, and reconfiguration services to customers who own compression equipment. The company was formerly known as Exterran Holdings, Inc. and changed its name to Archrock, Inc. in November 2015. Archrock, Inc. was founded in 1990 and is headquartered in Houston, Texas.

About American Midstream Partners

American Midstream Partners, LP provides midstream infrastructure that links the producers of natural gas, crude oil, natural gas liquids (NGLs), condensate, and specialty chemicals to various intermediate and end-use markets in the United States and Mexico. Its Gas Gathering and Processing Services segment offers services to producers of natural gas and crude oil, including transporting raw natural gas and crude oil from various receipt points through gathering systems, treating the raw natural gas, processing raw natural gas to separate the NGLs from the natural gas, fractionating NGLs, and selling or delivering pipeline-quality natural gas and NGLs. The company's Liquid Pipelines and Services segment transports, purchases, and sells crude oil. Its Natural Gas Transportation Services segment transports and delivers natural gas from producing wells, receipt points, or pipeline interconnects for shippers, local distribution companies, and utilities, as well as industrial, commercial, and power generation customers. The company's Offshore Pipelines and Services segment gathers and transports natural gas from receipt points to other pipeline interconnects, onshore facilities, and other delivery points. Its Terminalling Services segment provides petroleum products, distillates, chemicals, and agricultural products storage services at its marine terminals for commodity brokers, refiners, and chemical manufacturers. As of May 10, 2018, the company owned approximately 5,100 miles of interstate and intrastate pipelines; gas processing plants and fractionation facilities; an offshore semisubmersible floating production system with nameplate processing capacity of 90 thousand barrels per day of crude oil and 220 million cubic feet per day of natural gas; and terminal sites with approximately 6.7 million barrels of storage capacity. American Midstream GP, LLC serves as the general partner of the company. The company was founded in 2009 and is headquartered in Houston, Texas.

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