Archrock (NYSE:AROC – Get Free Report) and Ranger Energy Services (NYSE:RNGR – Get Free Report) are both energy companies, but which is the better stock? We will compare the two businesses based on the strength of their profitability, dividends, risk, institutional ownership, valuation, earnings and analyst recommendations.
Dividends
Archrock pays an annual dividend of $0.88 per share and has a dividend yield of 2.2%. Ranger Energy Services pays an annual dividend of $0.24 per share and has a dividend yield of 1.5%. Archrock pays out 47.8% of its earnings in the form of a dividend. Ranger Energy Services pays out 38.1% 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 has increased its dividend for 3 consecutive years and Ranger Energy Services has increased its dividend for 2 consecutive years. Archrock is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Risk & Volatility
Archrock has a beta of 0.87, indicating that its share price is 13% less volatile than the S&P 500. Comparatively, Ranger Energy Services has a beta of 0.12, indicating that its share price is 88% less volatile than the S&P 500.
Earnings & Valuation
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Archrock | $1.49 billion | 4.78 | $322.29 million | $1.84 | 22.08 |
| Ranger Energy Services | $546.90 million | 0.69 | $12.30 million | $0.63 | 25.39 |
Archrock has higher revenue and earnings than Ranger Energy Services. Archrock is trading at a lower price-to-earnings ratio than Ranger Energy Services, indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership
95.5% of Archrock shares are owned by institutional investors. Comparatively, 68.1% of Ranger Energy Services shares are owned by institutional investors. 2.9% of Archrock shares are owned by company insiders. Comparatively, 2.8% of Ranger Energy Services shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.
Profitability
This table compares Archrock and Ranger Energy Services’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Archrock | 21.45% | 22.89% | 7.61% |
| Ranger Energy Services | 2.58% | 5.12% | 3.60% |
Analyst Ratings
This is a breakdown of current recommendations for Archrock and Ranger Energy Services, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Archrock | 0 | 1 | 8 | 1 | 3.00 |
| Ranger Energy Services | 1 | 1 | 1 | 0 | 2.00 |
Archrock currently has a consensus target price of $41.14, indicating a potential upside of 1.28%. Ranger Energy Services has a consensus target price of $20.00, indicating a potential upside of 25.05%. Given Ranger Energy Services’ higher probable upside, analysts plainly believe Ranger Energy Services is more favorable than Archrock.
Summary
Archrock beats Ranger Energy Services on 15 of the 18 factors compared between the two stocks.
About Archrock
Archrock, Inc., together with its subsidiaries, operates as an energy infrastructure company in the United States. The company operates in two segments, Contract Operations and Aftermarket Services. It engages in the designing, sourcing, owning, installing, operating, servicing, repairing, and maintaining of its owned fleet of natural gas compression equipment to provide natural gas compression services. The company also sells over-the-counter parts and components; and provides operations, major and routine maintenance, overhaul, and reconfiguration services to customers who own compression equipment. It serves integrated and independent oil and natural gas processors, gatherers, and transporters. 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 Ranger Energy Services
Ranger Energy Services, Inc. provides onshore high specification well service rigs, wireline services, and complementary services to exploration and production companies in the United States. It operates through three segments: High Specification Rigs, Wireline Services, and Processing Solutions and Ancillary Services. The High Specification Rigs segment offers well service rigs and complementary equipment and services to facilitate operations throughout the lifecycle of a well; and well maintenance services. This segment also has a fleet of 402 well service rigs. The Wireline Services segment provides wireline production and intervention services to provide information to identify and resolve well production problems through cased hole logging, perforating, mechanical, and pipe recovery services; wireline completion services that are used primarily for pump down perforating operations to create perforations or entry holes through the production casing; and pumping services. This segment also has a fleet of 66 wireline units and 29 high-pressure pump trucks. The Processing Solutions and Ancillary Services segment rents well service-related equipment consisting of fluid pumps, power swivels, well control packages, hydraulic catwalks, frac tanks, pipe racks, and pipe handling tools; and coiled tubing, decommissioning, and snubbing services, as well as provides proprietary and modular equipment for the processing of natural gas streams. This segment also engages in the rental, installation, commissioning, start up, operation, and maintenance of mechanical refrigeration units, nitrogen gas liquid stabilizer units, nitrogen gas liquid storage units, and related equipment. Ranger Energy Services, Inc. was incorporated in 2017 and is headquartered in Houston, Texas.
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