Reviewing RPC (NYSE:RES) and Kinetik (NYSE:KNTK)

RPC (NYSE:RES) and Kinetik (NYSE:KNTK) are both energy companies, but which is the superior stock? We will contrast the two companies based on the strength of their risk, analyst recommendations, valuation, profitability, dividends, institutional ownership and earnings.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for RPC and Kinetik, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
RPC	2	3	0	0	1.60
Kinetik	0	5	6	0	2.55

RPC presently has a consensus price target of $4.69, suggesting a potential upside of 8.26%. Kinetik has a consensus price target of $52.67, suggesting a potential upside of 45.49%. Given Kinetik’s stronger consensus rating and higher possible upside, analysts plainly believe Kinetik is more favorable than RPC.

Profitability

This table compares RPC and Kinetik’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
RPC	3.77%	5.65%	4.42%
Kinetik	8.21%	-6.16%	1.95%

Institutional and Insider Ownership

41.1% of RPC shares are owned by institutional investors. Comparatively, 21.1% of Kinetik shares are owned by institutional investors. 60.5% of RPC shares are owned by company insiders. Comparatively, 3.8% of Kinetik shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Dividends

RPC pays an annual dividend of $0.16 per share and has a dividend yield of 3.7%. Kinetik pays an annual dividend of $3.12 per share and has a dividend yield of 8.6%. RPC pays out 61.5% of its earnings in the form of a dividend. Kinetik pays out 421.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Kinetik has raised its dividend for 1 consecutive years. Kinetik is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation & Earnings

This table compares RPC and Kinetik”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
RPC	$1.42 billion	0.67	$91.44 million	$0.26	16.65
Kinetik	$1.48 billion	3.95	$244.23 million	$0.74	48.92

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

Volatility & Risk

RPC has a beta of 0.83, suggesting that its stock price is 17% less volatile than the S&P 500. Comparatively, Kinetik has a beta of 3.11, suggesting that its stock price is 211% more volatile than the S&P 500.

Summary

Kinetik beats RPC on 12 of the 17 factors compared between the two stocks.

About RPC

RPC, Inc., through its subsidiaries, engages provision of a range of oilfield services and equipment for the oil and gas companies involved in the exploration, production, and development of oil and gas properties. The company operates through Technical Services and Support Services segments. The Technical Services segment offers pressure pumping, fracturing, acidizing, cementing, downhole tools, coiled tubing, snubbing, nitrogen, well control, wireline, pump down, and fishing services that are used in the completion, production, and maintenance of oil and gas wells. The Support Services segment provides a range of rental tools for onshore and offshore oil and gas well drilling, completion, and workover activities. This segment also offers oilfield pipe inspection, and pipe management and storage services, as well as well control training and consulting services. It operates in the United States, Africa, Canada, Argentina, China, Mexico, Latin America, the Middle East, and internationally. The company was incorporated in 1984 and is headquartered in Atlanta, Georgia.

About Kinetik

Kinetik Holdings Inc. operates as a midstream company in the Texas Delaware Basin. It provides gathering, transportation, compression, processing, and treating services for companies that produce natural gas, natural gas liquids, crude oil, and water. The company is headquartered in Midland, Texas.