Head-To-Head Analysis: Archrock (AROC) and The Competition

Archrock (NYSE:AROC) is one of 177 public companies in the “Energy Equipment & Services” industry, but how does it weigh in compared to its competitors? We will compare Archrock to similar businesses based on the strength of its dividends, earnings, valuation, analyst recommendations, profitability, institutional ownership and risk.

Risk and Volatility

Archrock has a beta of 0.92, indicating that its share price is 8% less volatile than the S&P 500. Comparatively, Archrock’s competitors have a beta of 0.84, indicating that their average share price is 16% less volatile than the S&P 500.

Institutional and Insider Ownership

95.5% of Archrock shares are owned by institutional investors. Comparatively, 49.0% of shares of all “Energy Equipment & Services” companies are owned by institutional investors. 2.9% of Archrock shares are owned by insiders. Comparatively, 12.3% of shares of all “Energy Equipment & Services” companies are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Archrock and its competitors revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Archrock	$1.49 billion	$322.29 million	17.02
Archrock Competitors	$3.23 billion	$29.73 million	21.64

Archrock’s competitors have higher revenue, but lower earnings than Archrock. Archrock is trading at a lower price-to-earnings ratio than its competitors, indicating that it is currently more affordable than other companies in its industry.

Dividends

Archrock pays an annual dividend of $0.92 per share and has a dividend yield of 2.9%. Archrock pays out 49.5% of its earnings in the form of a dividend. As a group, “Energy Equipment & Services” companies pay a dividend yield of 2.8% and pay out 54.6% of their earnings in the form of a dividend. Archrock has raised its dividend for 3 consecutive years. Archrock is clearly a better dividend stock than its competitors, given its higher yield and lower payout ratio.

Profitability

This table compares Archrock and its competitors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Archrock	21.84%	22.22%	7.56%
Archrock Competitors	-11.24%	7.46%	1.47%

Analyst Recommendations

This is a summary of current ratings for Archrock and its competitors, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Archrock	1	0	9	0	2.80
Archrock Competitors	1662	6805	8598	486	2.45

Archrock currently has a consensus target price of $42.12, indicating a potential upside of 33.05%. As a group, “Energy Equipment & Services” companies have a potential upside of 22.28%. Given Archrock’s stronger consensus rating and higher possible upside, analysts plainly believe Archrock is more favorable than its competitors.

Summary

Archrock beats its competitors on 11 of the 15 factors compared.

About Archrock

Archrock, Inc., together with its subsidiaries, operates as an energy infrastructure company in the United States. The company operates in two segments, Contract Operations and Aftermarket Services. It engages in the designing, sourcing, owning, installing, operating, servicing, repairing, and maintaining of its owned fleet of natural gas compression equipment to provide natural gas compression services. The company also sells over-the-counter parts and components; and provides operations, major and routine maintenance, overhaul, and reconfiguration services to customers who own compression equipment. It serves integrated and independent oil and natural gas processors, gatherers, and transporters. 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.