Archrock (AROC) vs. USA Compression Partners (USAC) Head to Head Survey

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Archrock (NYSE: AROC) and USA Compression Partners (NYSE:USAC) are both small-cap oils/energy companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, valuation, risk, profitability, dividends, earnings and analyst recommendations.

Dividends

Archrock pays an annual dividend of $0.48 per share and has a dividend yield of 4.2%. USA Compression Partners pays an annual dividend of $2.10 per share and has a dividend yield of 12.4%. Archrock pays out -240.0% of its earnings in the form of a dividend. USA Compression Partners pays out 1,312.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Insider and Institutional Ownership

96.7% of Archrock shares are held by institutional investors. Comparatively, 64.4% of USA Compression Partners shares are held by institutional investors. 2.5% of Archrock shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Archrock and USA Compression Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Archrock 3.28% -1.00% -0.30%
USA Compression Partners -1.88% 2.54% 0.98%

Earnings and Valuation

This table compares Archrock and USA Compression Partners’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Archrock $794.66 million 1.02 $18.95 million ($0.20) -56.75
USA Compression Partners $280.22 million 5.44 $11.44 million $0.16 105.88

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

Analyst Ratings

This is a summary of recent recommendations and price targets for Archrock and USA Compression Partners, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Archrock 0 2 5 0 2.71
USA Compression Partners 0 1 3 0 2.75

Archrock currently has a consensus price target of $14.00, suggesting a potential upside of 23.35%. USA Compression Partners has a consensus price target of $20.75, suggesting a potential upside of 22.49%. Given Archrock’s higher possible upside, equities analysts plainly believe Archrock is more favorable than USA Compression Partners.

Risk & Volatility

Archrock has a beta of 2.89, indicating that its stock price is 189% more volatile than the S&P 500. Comparatively, USA Compression Partners has a beta of 1.19, indicating that its stock price is 19% more volatile than the S&P 500.

Summary

Archrock beats USA Compression Partners on 9 of the 16 factors compared between the two stocks.

About Archrock

Archrock, Inc. engages in the natural gas contract operations services business in the United States. The company provides natural gas compression services to customers in the oil and natural gas industry. It also offers aftermarket services, such as parts and components; and operation, maintenance, overhaul, and reconfiguration services to customers who own compression equipment. 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.

About USA Compression Partners

USA Compression Partners, LP provides compression services under term contracts with customers in the natural gas and crude oil industries in the United States. The company engineers, designs, operates, services, and repairs its compression units; and maintains related support inventory and equipment. It also provides compression services in various shale plays, including the Utica, Marcellus, Permian Basin, Delaware Basin, Eagle Ford, Mississippi Lime, Granite Wash, Woodford, Barnett, Haynesville, Niobrara, and Fayetteville shales. As of December 31, 2017, the company had approximately 1,799,781 horsepower in its fleet. It serves oil companies; and independent producers, processors, gatherers, and transporters of natural gas and crude oil. USA Compression GP, LLC operates as the general partner of USA Compression Partners, LP. The company was formerly known as Compression Holdings, LP, and changed its name to USA Compression Partners, LP in June 2011. USA Compression Partners, LP was founded in 1998 and is headquartered in Austin, Texas.

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