Archrock Partners, L.P. (NASDAQ: APLP) and Gulf Island Fabrication (NASDAQ:GIFI) are both small-cap oils/energy companies, but which is the better business? We will contrast the two businesses based on the strength of their profitability, analyst recommendations, institutional ownership, risk, earnings, dividends and valuation.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Archrock Partners, L.P. and Gulf Island Fabrication, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Archrock Partners, L.P. 0 2 1 0 2.33
Gulf Island Fabrication 0 0 0 0 N/A

Archrock Partners, L.P. currently has a consensus price target of $18.50, suggesting a potential upside of 28.38%. Given Archrock Partners, L.P.’s higher possible upside, analysts plainly believe Archrock Partners, L.P. is more favorable than Gulf Island Fabrication.

Volatility & Risk

Archrock Partners, L.P. has a beta of 2.24, indicating that its share price is 124% more volatile than the S&P 500. Comparatively, Gulf Island Fabrication has a beta of 0.93, indicating that its share price is 7% less volatile than the S&P 500.

Valuation and Earnings

This table compares Archrock Partners, L.P. and Gulf Island Fabrication’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Archrock Partners, L.P. $546.43 million 1.73 $236.11 million ($0.22) -65.50
Gulf Island Fabrication $204.71 million 0.91 -$10.08 million ($1.37) -9.20

Archrock Partners, L.P. has higher revenue and earnings than Gulf Island Fabrication. Archrock Partners, L.P. is trading at a lower price-to-earnings ratio than Gulf Island Fabrication, indicating that it is currently the more affordable of the two stocks.

Dividends

Archrock Partners, L.P. pays an annual dividend of $1.14 per share and has a dividend yield of 7.9%. Gulf Island Fabrication pays an annual dividend of $0.04 per share and has a dividend yield of 0.3%. Archrock Partners, L.P. pays out -518.2% of its earnings in the form of a dividend. Gulf Island Fabrication pays out -2.9% 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, L.P. is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Archrock Partners, L.P. and Gulf Island Fabrication’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Archrock Partners, L.P. -2.49% 6.02% 1.57%
Gulf Island Fabrication -9.96% -7.83% -6.35%

Institutional and Insider Ownership

41.2% of Archrock Partners, L.P. shares are held by institutional investors. Comparatively, 65.8% of Gulf Island Fabrication shares are held by institutional investors. 0.4% of Archrock Partners, L.P. shares are held by insiders. Comparatively, 3.4% of Gulf Island Fabrication shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Summary

Archrock Partners, L.P. beats Gulf Island Fabrication on 12 of the 14 factors compared between the two stocks.

Archrock Partners, L.P. Company Profile

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.

Gulf Island Fabrication Company Profile

Gulf Island Fabrication, Inc. (Gulf Island) is a holding company. The Company, along with its subsidiaries, is a fabricator of steel platforms and other specialized structures for customers in the offshore oil and gas industry. It also performs onshore and offshore construction and fabrication services for customers in the marine industry. Its primary activity is the fabrication of offshore drilling and production platforms and other steel structures for customers in the oil and gas and marine industries, including jackets and deck sections of fixed production platforms, hull, tendon, and/or deck sections of floating production platforms, piles, wellhead protectors. It conducts its operations through its subsidiaries, which include Gulf Island, L.L.C.; Gulf Marine Fabricators, L.P.; Gulf Island Marine Fabricators, L.L.C.; Gulf Island Shipyards, L.L.C.; Dolphin Services, L.L.C.; and Dolphin Steel Sales, L.L.C.

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