Analyzing Kinetik (NYSE:KNTK) and RPC (NYSE:RES)

Kinetik (NYSE:KNTK) and RPC (NYSE:RES) are both energy companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, earnings, analyst recommendations, dividends, valuation, profitability and institutional ownership.

Analyst Recommendations

This is a breakdown of current recommendations for Kinetik and RPC, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Kinetik	0	5	6	0	2.55
RPC	2	3	0	0	1.60

Kinetik presently has a consensus price target of $52.67, indicating a potential upside of 41.12%. RPC has a consensus price target of $4.69, indicating a potential upside of 8.38%. Given Kinetik’s stronger consensus rating and higher probable upside, analysts plainly believe Kinetik is more favorable than RPC.

Profitability

This table compares Kinetik and RPC’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Kinetik	8.21%	-6.16%	1.95%
RPC	3.77%	5.65%	4.42%

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Kinetik	$1.48 billion	4.08	$244.23 million	$0.74	50.43
RPC	$1.42 billion	0.67	$91.44 million	$0.26	16.63

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

Dividends

Kinetik pays an annual dividend of $3.12 per share and has a dividend yield of 8.4%. RPC pays an annual dividend of $0.16 per share and has a dividend yield of 3.7%. Kinetik pays out 421.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. RPC pays out 61.5% of its earnings in the form of a dividend. Kinetik has raised its dividend for 1 consecutive years. Kinetik is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional & Insider Ownership

21.1% of Kinetik shares are owned by institutional investors. Comparatively, 41.1% of RPC shares are owned by institutional investors. 3.8% of Kinetik shares are owned by company insiders. Comparatively, 60.5% of RPC shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Risk and Volatility

Kinetik has a beta of 3.11, suggesting that its share price is 211% more volatile than the S&P 500. Comparatively, RPC has a beta of 0.83, suggesting that its share price is 17% less volatile than the S&P 500.

Summary

Kinetik beats RPC on 12 of the 17 factors compared between the two stocks.

About Kinetik

Kinetik Holdings Inc. operates as a midstream company in the Texas Delaware Basin. It provides gathering, transportation, compression, processing, and treating services for companies that produce natural gas, natural gas liquids, crude oil, and water. The company is headquartered in Midland, Texas.

About RPC

RPC, Inc., through its subsidiaries, engages provision of a range of oilfield services and equipment for the oil and gas companies involved in the exploration, production, and development of oil and gas properties. The company operates through Technical Services and Support Services segments. The Technical Services segment offers pressure pumping, fracturing, acidizing, cementing, downhole tools, coiled tubing, snubbing, nitrogen, well control, wireline, pump down, and fishing services that are used in the completion, production, and maintenance of oil and gas wells. The Support Services segment provides a range of rental tools for onshore and offshore oil and gas well drilling, completion, and workover activities. This segment also offers oilfield pipe inspection, and pipe management and storage services, as well as well control training and consulting services. It operates in the United States, Africa, Canada, Argentina, China, Mexico, Latin America, the Middle East, and internationally. The company was incorporated in 1984 and is headquartered in Atlanta, Georgia.