LandBridge (NYSE:LB – Get Free Report) and Archrock (NYSE:AROC – Get Free Report) are both mid-cap energy companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, risk, valuation, institutional ownership, profitability, analyst recommendations and dividends.
Institutional & Insider Ownership
95.5% of Archrock shares are held by institutional investors. 61.2% of LandBridge shares are held by company insiders. Comparatively, 2.9% of Archrock shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.
Analyst Recommendations
This is a summary of current ratings for LandBridge and Archrock, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| LandBridge | 2 | 5 | 3 | 0 | 2.10 |
| Archrock | 1 | 0 | 10 | 0 | 2.82 |
LandBridge currently has a consensus target price of $81.67, suggesting a potential downside of 1.13%. Archrock has a consensus target price of $42.12, suggesting a potential upside of 42.49%. Given Archrock’s stronger consensus rating and higher probable upside, analysts clearly believe Archrock is more favorable than LandBridge.
Dividends
LandBridge pays an annual dividend of $0.48 per share and has a dividend yield of 0.6%. Archrock pays an annual dividend of $0.92 per share and has a dividend yield of 3.1%. LandBridge pays out 42.5% of its earnings in the form of a dividend. Archrock pays out 49.5% 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.
Volatility and Risk
LandBridge has a beta of 0.17, meaning that its stock price is 83% less volatile than the S&P 500. Comparatively, Archrock has a beta of 0.92, meaning that its stock price is 8% less volatile than the S&P 500.
Earnings & Valuation
This table compares LandBridge and Archrock”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| LandBridge | $199.09 million | 31.98 | $30.13 million | $1.13 | 73.10 |
| Archrock | $1.49 billion | 3.48 | $322.29 million | $1.86 | 15.89 |
Archrock has higher revenue and earnings than LandBridge. Archrock is trading at a lower price-to-earnings ratio than LandBridge, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares LandBridge and Archrock’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| LandBridge | 16.49% | 4.75% | 2.87% |
| Archrock | 21.84% | 22.22% | 7.56% |
Summary
Archrock beats LandBridge on 13 of the 17 factors compared between the two stocks.
About LandBridge
LandBridge Company LLC owns and manages land and resources to support and enhance oil and natural gas development in the United States. It owns surface acres in and around the Delaware Basin in Texas and New Mexico. The company holds a portfolio of oil and gas royalties. It also sells brackish water and other surface composite materials. The company was founded in 2021 and is based in Houston, Texas. LandBridge Company LLC operates as a subsidiary of LandBridge Holdings LLC.
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.
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