Critical Analysis: Oceaneering International (OII) versus Archrock Partners (APLP)
Oceaneering International (NYSE: OII) and Archrock Partners (NASDAQ:APLP) are both small-cap oils/energy companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, valuation, earnings, profitability, analyst recommendations, risk and institutional ownership.
Insider & Institutional Ownership
99.7% of Oceaneering International shares are owned by institutional investors. Comparatively, 46.8% of Archrock Partners shares are owned by institutional investors. 0.9% of Oceaneering International shares are owned by company insiders. Comparatively, 0.4% of Archrock Partners shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
This is a summary of recent ratings and price targets for Oceaneering International and Archrock Partners, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Oceaneering International currently has a consensus price target of $24.84, indicating a potential upside of 31.87%. Archrock Partners has a consensus price target of $17.50, indicating a potential upside of 55.97%. Given Archrock Partners’ stronger consensus rating and higher possible upside, analysts clearly believe Archrock Partners is more favorable than Oceaneering International.
Earnings and Valuation
This table compares Oceaneering International and Archrock Partners’ revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Oceaneering International||$2.27 billion||0.82||$24.58 million||($0.19)||-99.16|
|Archrock Partners||$562.36 million||1.40||-$10.75 million||($0.27)||-41.55|
Oceaneering International has higher revenue and earnings than Archrock Partners. Oceaneering International is trading at a lower price-to-earnings ratio than Archrock Partners, indicating that it is currently the more affordable of the two stocks.
This table compares Oceaneering International and Archrock Partners’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Volatility and Risk
Oceaneering International has a beta of 1.63, indicating that its share price is 63% more volatile than the S&P 500. Comparatively, Archrock Partners has a beta of 2.21, indicating that its share price is 121% more volatile than the S&P 500.
Oceaneering International pays an annual dividend of $0.60 per share and has a dividend yield of 3.2%. Archrock Partners pays an annual dividend of $1.14 per share and has a dividend yield of 10.2%. Oceaneering International pays out -315.8% of its earnings in the form of a dividend. Archrock Partners pays out -422.2% 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 Partners is clearly the better dividend stock, given its higher yield and lower payout ratio.
About Oceaneering International
Oceaneering International, Inc. is an oilfield provider of engineered services and products, primarily to the offshore oil and gas industry, with a focus on deepwater applications. The Company’s business segments are contained within two businesses: services and products provided to the oil and gas industry (Oilfield) and all other services and products (Advanced Technologies). Its four business segments within the Oilfield business are Remotely Operated Vehicles (ROVs), Subsea Products, Subsea Projects and Asset Integrity. The services and products it provides to the oil and gas industry include remotely operated vehicles, specialty subsea hardware, engineering and project management, subsea intervention services, including manned diving, survey and positioning services and asset integrity and nondestructive testing services. The Company serves the defense, aerospace and commercial theme park industries.
About Archrock Partners
Archrock Partners, L.P. is engaged in natural gas compression industry in the United States. The Company’s contract operations services include designing, sourcing, owning, installing, operating, servicing, repairing and maintaining equipment to provide natural gas compression services to its customers. It provides contract operations services, including the personnel, equipment, tools, materials and supplies to meet its customers’ natural gas compression needs. Archrock General Partner, L.P., its general partner, is a subsidiary of Archrock and has responsibility for conducting its business and for managing its operations. The Company utilizes both slow and high speed reciprocating compressors primarily driven by internal natural gas fired combustion engines. Its customers include companies engaged in various aspects of the oil and natural gas industry, including natural gas producers, processors, gatherers, transporters and storage providers.
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