Forum Energy Technologies (NYSE: FET) and Emerge Energy Services (NYSE:EMES) are both small-cap oils/energy companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, earnings, dividends, profitability, risk, valuation and analyst recommendations.

Insider and Institutional Ownership

98.7% of Forum Energy Technologies shares are owned by institutional investors. Comparatively, 23.5% of Emerge Energy Services shares are owned by institutional investors. 32.8% of Forum Energy Technologies shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of current recommendations for Forum Energy Technologies and Emerge Energy Services, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Forum Energy Technologies 0 12 2 0 2.14
Emerge Energy Services 0 5 4 0 2.44

Forum Energy Technologies currently has a consensus target price of $17.92, suggesting a potential upside of 35.78%. Emerge Energy Services has a consensus target price of $16.00, suggesting a potential upside of 117.10%. Given Emerge Energy Services’ stronger consensus rating and higher possible upside, analysts plainly believe Emerge Energy Services is more favorable than Forum Energy Technologies.

Profitability

This table compares Forum Energy Technologies and Emerge Energy Services’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Forum Energy Technologies -16.85% -3.97% -2.63%
Emerge Energy Services -10.94% -69.67% -11.03%

Risk & Volatility

Forum Energy Technologies has a beta of 1.66, suggesting that its share price is 66% more volatile than the S&P 500. Comparatively, Emerge Energy Services has a beta of 1.59, suggesting that its share price is 59% more volatile than the S&P 500.

Valuation & Earnings

This table compares Forum Energy Technologies and Emerge Energy Services’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Forum Energy Technologies $587.60 million 2.43 -$81.97 million ($1.26) -10.48
Emerge Energy Services $128.40 million 1.73 -$72.77 million ($1.19) -6.19

Emerge Energy Services has lower revenue, but higher earnings than Forum Energy Technologies. Forum Energy Technologies is trading at a lower price-to-earnings ratio than Emerge Energy Services, indicating that it is currently the more affordable of the two stocks.

Summary

Forum Energy Technologies beats Emerge Energy Services on 7 of the 13 factors compared between the two stocks.

Forum Energy Technologies Company Profile

Forum Energy Technologies, Inc. is an oilfield products company. The Company designs, manufactures and distributes products, and engages in aftermarket services, parts supply and related services. The Company operates through three segments: Drilling & Subsea, Completions, and Production & Infrastructure. The Drilling & Subsea segment designs and manufactures products, and provides related services to the drilling and subsea construction markets. The Completions segment designs, manufactures and supplies products, and provide related services to the well construction, completion, stimulation and intervention markets. The Production & Infrastructure segment designs, manufactures and supplies products, and provides related equipment and services to production and infrastructure markets. Its product offering includes a mix of engineered capital products and replaced items that are used in the exploration, development, production and transportation of oil and natural gas.

Emerge Energy Services Company Profile

Emerge Energy Services LP owns, operates, acquires and develops a portfolio of energy service assets. The Company operates through Sand segment. The Company conducts its Sand operations through its subsidiary, Superior Silica Sands LLC (SSS). The Company’s Sand business mines, processes and distributes silica sand, an input for the hydraulic fracturing of oil and gas wells. As of December 31, 2016, its Wisconsin facilities consisted of three dry plants located in Arland, Barron and New Auburn, Wisconsin, with a total permitted capacity of 6.3 million finished tons per year, and five wet plants and mine complexes. As of December 31, 2016, its dry plant in Kosse, Texas, had a capacity of 600,000 tons per year that is supplied by a separate mine and wet plant that processes local Texas sand. As of December 31, 2016, the Company also had 14 transload facilities located throughout North America in the basins where it delivers its sand, as well as a fleet of 5,573 railcars.

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