Archrock Partners, L.P. (NASDAQ: APLP) and CSI Compressco (NASDAQ:CCLP) are both small-cap oils/energy companies, but which is the superior business? We will compare the two companies based on the strength of their institutional ownership, earnings, profitability, analyst recommendations, dividends, valuation and risk.

Valuation and Earnings

This table compares Archrock Partners, L.P. and CSI Compressco’s gross 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 1.72 $236.11 million ($0.22) -65.04
CSI Compressco N/A N/A N/A ($1.50) -3.46

Archrock Partners, L.P. has higher revenue and earnings than CSI Compressco. Archrock Partners, L.P. is trading at a lower price-to-earnings ratio than CSI Compressco, 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 8.0%. CSI Compressco pays an annual dividend of $0.75 per share and has a dividend yield of 14.5%. Archrock Partners, L.P. pays out -518.2% of its earnings in the form of a dividend. CSI Compressco pays out -50.0% 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.

Analyst Recommendations

This is a summary of recent ratings for Archrock Partners, L.P. and CSI Compressco, 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
CSI Compressco 1 3 0 0 1.75

Archrock Partners, L.P. presently has a consensus target price of $18.50, indicating a potential upside of 29.28%. CSI Compressco has a consensus target price of $6.00, indicating a potential upside of 15.72%. Given Archrock Partners, L.P.’s stronger consensus rating and higher possible upside, equities analysts plainly believe Archrock Partners, L.P. is more favorable than CSI Compressco.

Volatility and Risk

Archrock Partners, L.P. has a beta of 2.24, meaning that its share price is 124% more volatile than the S&P 500. Comparatively, CSI Compressco has a beta of 2.01, meaning that its share price is 101% more volatile than the S&P 500.

Institutional and Insider Ownership

41.2% of Archrock Partners, L.P. shares are owned by institutional investors. Comparatively, 28.7% of CSI Compressco shares are owned by institutional investors. 0.4% of Archrock Partners, L.P. shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Profitability

This table compares Archrock Partners, L.P. and CSI Compressco’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%
CSI Compressco -17.01% -36.43% -6.45%

Summary

Archrock Partners, L.P. beats CSI Compressco on 12 of the 13 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.

CSI Compressco Company Profile

CSI Compressco LP is a provider of compression services and equipment for natural gas and oil production, gathering, transportation, processing and storage. The Company sells custom-designed compressor packages and oilfield fluid pump systems, and provides aftermarket services and compressor package parts and components manufactured by third-party suppliers. It provides these compression services and equipment to a base of natural gas and oil exploration and production, midstream and transmission companies operating throughout many of the onshore producing regions of the United States, as well as in a number of foreign countries, including Mexico, Canada and Argentina. It is a service provider of natural gas compression services in the United States, utilizing its fleet of compressor packages that employs a spectrum of low-, medium- and high-horsepower engines. As of December 31, 2016, its fleet included approximately 6,000 compressor packages.

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