Smart Sand (NASDAQ:SND) versus Archrock (NYSE:AROC) Critical Analysis

Smart Sand (NASDAQ:SND) and Archrock (NYSE:AROC) are both energy companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, earnings, valuation, profitability, risk and dividends.

Valuation & Earnings

This table compares Smart Sand and Archrock”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Smart Sand	$311.37 million	0.30	$2.99 million	$0.01	213.00
Archrock	$1.16 billion	3.81	$172.23 million	$1.32	19.03

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Smart Sand	0.26%	-8.83%	-6.20%
Archrock	17.17%	18.74%	6.28%

Insider and Institutional Ownership

35.2% of Smart Sand shares are held by institutional investors. Comparatively, 95.5% of Archrock shares are held by institutional investors. 34.0% of Smart Sand shares are held by company insiders. Comparatively, 2.6% of Archrock shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Volatility and Risk

Smart Sand has a beta of 0.78, indicating that its share price is 22% less volatile than the S&P 500. Comparatively, Archrock has a beta of 1.07, indicating that its share price is 7% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and price targets for Smart Sand and Archrock, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Smart Sand	1	0	0	0	1.00
Archrock	0	1	7	0	2.88

Archrock has a consensus price target of $30.00, suggesting a potential upside of 19.45%. Given Archrock’s stronger consensus rating and higher possible upside, analysts plainly believe Archrock is more favorable than Smart Sand.

Summary

Archrock beats Smart Sand on 12 of the 14 factors compared between the two stocks.

About Smart Sand

Smart Sand, Inc., an integrated frac and industrial sand supply and services company, engages in the excavation, processing, and sale of sands or proppant for use in hydraulic fracturing operations in the oil and gas industry in the United States. It also provides proppant logistics services; and wellsite storage solutions through SmartSystems products and services. The company sells its products primarily to oil and natural gas exploration and production companies, oilfield service companies, and industrial manufacturers. Smart Sand, Inc. was incorporated in 2011 and is headquartered in Spring, Texas.

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.