Archrock (NYSE:AROC – Get Free Report) and RPC (NYSE:RES – Get Free Report) are both energy companies, but which is the superior business? We will contrast the two companies based on the strength of their analyst recommendations, risk, earnings, dividends, institutional ownership, valuation and profitability.
Insider and Institutional Ownership
95.5% of Archrock shares are owned by institutional investors. Comparatively, 41.1% of RPC shares are owned by institutional investors. 2.9% of Archrock shares are owned by company insiders. Comparatively, 58.8% of RPC shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Earnings & Valuation
This table compares Archrock and RPC”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Archrock | $1.49 billion | 3.29 | $322.29 million | $1.94 | 14.40 |
| RPC | $1.63 billion | 0.71 | $32.08 million | ($0.17) | -30.74 |
Archrock has higher earnings, but lower revenue than RPC. RPC is trading at a lower price-to-earnings ratio than Archrock, indicating that it is currently the more affordable of the two stocks.
Analyst Ratings
This is a summary of recent recommendations for Archrock and RPC, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Archrock | 0 | 1 | 9 | 0 | 2.90 |
| RPC | 3 | 2 | 1 | 0 | 1.67 |
Archrock presently has a consensus target price of $42.12, suggesting a potential upside of 50.83%. RPC has a consensus target price of $5.67, suggesting a potential upside of 8.45%. Given Archrock’s stronger consensus rating and higher possible upside, equities analysts clearly believe Archrock is more favorable than RPC.
Volatility & Risk
Archrock has a beta of 0.96, meaning that its share price is 4% less volatile than the S&P 500. Comparatively, RPC has a beta of 0.82, meaning that its share price is 18% less volatile than the S&P 500.
Profitability
This table compares Archrock and RPC’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Archrock | 22.89% | 22.33% | 7.79% |
| RPC | -1.77% | 5.26% | 3.97% |
Dividends
Archrock pays an annual dividend of $0.92 per share and has a dividend yield of 3.3%. RPC pays an annual dividend of $0.16 per share and has a dividend yield of 3.1%. Archrock pays out 47.4% of its earnings in the form of a dividend. RPC pays out -94.1% 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 raised its dividend for 3 consecutive years. Archrock is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Summary
Archrock beats RPC on 14 of the 17 factors compared between the two stocks.
About Archrock
Archrock, Inc. provides natural gas compression services to companies in the oil and natural gas industry. Its equipment helps move natural gas from wells through gathering systems and pipelines, supporting production and transportation. The company’s contract operations include supplying, operating and maintaining compression equipment at customer sites. Through its aftermarket services business, Archrock provides maintenance, repair and other support for compression equipment, including units it did not originally supply.
About RPC
RPC, Inc. is an oilfield services company that provides specialized equipment and services to exploration and production companies. Its offerings support the drilling, completion, maintenance and enhancement of oil and natural gas wells. The company’s services include pressure pumping, coiled tubing, wireline, downhole tools, well control and related well-intervention work. RPC also provides equipment rental and other technical services used in oilfield operations. Founded in 1984 and headquartered in Atlanta, Georgia, RPC serves customers primarily in the United States, along with selected international markets.
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