Head-To-Head Analysis: LandBridge (NYSE:LB) & Archrock (NYSE:AROC)

Archrock (NYSE:AROC) and LandBridge (NYSE:LB) are both mid-cap energy companies, but which is the better stock? We will compare the two companies based on the strength of their earnings, risk, valuation, profitability, institutional ownership, dividends and analyst recommendations.

Dividends

Archrock pays an annual dividend of $0.92 per share and has a dividend yield of 3.2%. LandBridge pays an annual dividend of $0.48 per share and has a dividend yield of 0.6%. Archrock pays out 49.5% of its earnings in the form of a dividend. LandBridge pays out 42.5% 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 has raised its dividend for 3 consecutive years. Archrock is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Archrock and LandBridge’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Archrock	21.84%	22.22%	7.56%
LandBridge	16.49%	4.75%	2.87%

Institutional and Insider Ownership

95.5% of Archrock shares are owned by institutional investors. 2.9% of Archrock shares are owned by company insiders. Comparatively, 61.2% of LandBridge shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Risk & Volatility

Archrock has a beta of 0.92, meaning that its stock price is 8% less volatile than the S&P 500. Comparatively, LandBridge has a beta of 0.17, meaning that its stock price is 83% less volatile than the S&P 500.

Earnings and Valuation

This table compares Archrock and LandBridge”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Archrock	$1.49 billion	3.35	$322.29 million	$1.86	15.28
LandBridge	$199.09 million	29.79	$30.13 million	$1.13	68.10

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

Analyst Ratings

This is a summary of recent ratings and recommmendations for Archrock and LandBridge, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Archrock	1	0	10	0	2.82
LandBridge	1	5	4	0	2.30

Archrock currently has a consensus target price of $42.12, suggesting a potential upside of 48.19%. LandBridge has a consensus target price of $83.00, suggesting a potential upside of 7.86%. Given Archrock’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Archrock is more favorable than LandBridge.

Summary

Archrock beats LandBridge on 13 of the 17 factors compared between the two stocks.

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.

About LandBridge

LandBridge Company LLC owns and manages land and resources to support and enhance oil and natural gas development in the United States. It owns surface acres in and around the Delaware Basin in Texas and New Mexico. The company holds a portfolio of oil and gas royalties. It also sells brackish water and other surface composite materials. The company was founded in 2021 and is based in Houston, Texas. LandBridge Company LLC operates as a subsidiary of LandBridge Holdings LLC.